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Measuring the Gains from Trade Under Monopolistic Competition
Feenstra, Robert C. - 2010
Three sources of gains from trade under monopolistic competition are: (i) new import varieties available to consumers; (ii) enhanced efficiency as more productive firms begin exporting and less productive firms exit; (iii) reduced markups charged by firms due to import competition. The first...
Persistent link: https://www.econbiz.de/10013149703
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International Welfare and Employment Linkages Arising from Minimum Wages
Egger, Hartmut - 2010
workers at home and abroad. In an extension to our baseline model, we illustrate that offshoring production from the high …
Persistent link: https://www.econbiz.de/10013151811
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Innovation, Competition and Welfare-Enhancing Monopoly
Darby, Michael R. - 2011
The basic competitive model with freely available technology is suited for static industries but misleading as applied to major innovative economies for which development of new technologies equals in magnitude around 10% of gross domestic investment. We distinguish free generic technology from...
Persistent link: https://www.econbiz.de/10012757081
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Pegs, Downward Wage Rigidity, and Unemployment : The Role of Financial Structure
Schmitt-Grohé, Stephanie - 2012
This paper studies the relationship between financial structure and the welfare consequences of fixed exchange rate regimes in small open emerging economies with downward nominal wage rigidity. The paper presents two surprising results. First, a pegging economy might be better off with a closed...
Persistent link: https://www.econbiz.de/10013103809
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Notes for a New Guide to Keynes (I) : Wages, Aggregate Demand, and Employment
Galí, Jordi - 2021
I revisit the General Theory's discussion of the role of wages in employment determination through the lens of the New Keynesian model. The analysis points to the key role played by the monetary policy rule in shaping the link between wages and employment, and in determining the welfare impact...
Persistent link: https://www.econbiz.de/10013223078
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A Theory of Macroprudential Policies in the Presence of Nominal Rigidities
Farhi, Emmanuel - 2013
We propose a theory of monetary policy and macroprudential interventions in financial markets. We focus on economies with nominal rigidities in goods and labor markets and subject to constraints on monetary policy, such as the zero lower bound or fixed exchange rates. We identify an aggregate...
Persistent link: https://www.econbiz.de/10013077948
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Understanding the Gains from Wage Flexibility : The Exchange Rate Connection
Galí, Jordi; Monacelli, Tommaso - 2021
We study the gains from increased wage flexibility using a small open economy model with staggered price and wage setting. Two results stand out: (i) the effectiveness of labor cost reductions as a means to stimulate employment is much smaller in a currency union, (ii) an increase in wage...
Persistent link: https://www.econbiz.de/10013311616
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Productivity Spillovers, Terms of Trade and the "Home Market Effect"
Corsetti, Giancarlo; Martin, Philippe; Pesenti, Paolo A. - 2021
This paper analyzes the welfare implications of international spillovers related to productivity gains, changes in market size, or government spending. We introduce trade costs and endogenous varieties in a two-country general-equilibrium model with monopolistic competition, drawing a...
Persistent link: https://www.econbiz.de/10013220817
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Inequality and Trade
Mitra, Devashish; Trindade, Vitor - 2022
We incorporate demand-side considerations in trade in a systematic but straightforward way. We do so by focusing on the role of inequality in the determination of trade flows and patterns. With nonhomothetic preferences, when countries are similar in all respects but asset inequality, we find...
Persistent link: https://www.econbiz.de/10014074568
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Y2k and Offshoring : The Role of External Economies and Firm Heterogeneity
Mitra, Devashish; Ranjan, Priya - 2021
We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities …, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in … externalities can help explain the dynamic process of offshoring, where the most productive firms offshore first and the others …
Persistent link: https://www.econbiz.de/10013233896