Bayoumi, Tamim; Laxton, Douglas; Pesenti, Paolo A. - 2021
. After calibrating the model to the euro area vs. the rest of the industrial world, the paper draws three conclusions. First … show that differences in competition can account for over half of the current gap in GDP per capita between the euro area … and the US. Second, it may improve macroeconomic management by increasing the responsiveness of wages and prices to market …