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Markov Perfect Industry Dynamics with Many Firms

Weintraub, Gabriel Y.; Benkard, C. Lanier; Van Roy, Benjamin - 2021

We propose an approximation method for analyzing Ericson and Pakes (1995)-style dynamic models of imperfect competition. We develop a simple algorithm for computing an ``oblivious equilibrium,'' in which each firm is assumed to make decisions based only on its own state and knowledge of the long...

Persistent link: https://www.econbiz.de/10013220417

Anonymous Market and Group Ties in International Trade

Casella, Alessandra; Rauch, James E. - 2021

When trade involves differentiated products, preferential ties to a group settled abroad facilitate an exporter's entry into the foreign market by providing information and access to distribution channels. This contrasts with the difficulties experienced by an unattached producer unfamiliar with...

Persistent link: https://www.econbiz.de/10013226069

Undertstanding the Home Market Effect and the Gravity Equation : the Role of Differentiating Goods

Feenstra, Robert C.; Markusen, James R.; Rose, Andrew Kenan - 2021

This paper argues that the theoretical foundations for the gravity equation are general, while the empirical performance of the gravity equation is specific to the type of goods examined. Most existing theory for the gravity equation depends on the assumption of differentiated goods. We show...

Persistent link: https://www.econbiz.de/10013248683

Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets

Rotemberg, Julio J.; Woodford, Michael - 2021

This paper discusses the consequences of introducing imperfectly competitive product markets into an otherwise standard neoclassical growth model. We pay particular attention to the consequences of imperfect competition for the explanation of fluctuations in aggregate economic activity. Market...

Persistent link: https://www.econbiz.de/10013232158

A Critical Assessment of the Role of Imperfect Competition in Macroeconomics

Carlton, Dennis W. - 2021

New Keynesian models and some models of growth rely on market power for their results. This sole focus on market power as the source for certain macroeconomic phenomena is misguided both theoretically and empirically. New Keynesian multipliers are closely related to standard measures of...

Persistent link: https://www.econbiz.de/10013232435

The More We Die, the More We Sell? A Simple Test of the Home-Market Effect

Costinot, Arnaud - 2016

countries with larger demand for some products at home tend to have larger sales of the same products abroad. In this paper, we … demand. We find that the correlation between predicted home demand and sales abroad is positive and greater than the … correlation between predicted home demand and purchases from abroad. In short, countries tend to be net sellers of the drugs that …

Persistent link: https://www.econbiz.de/10012984754

Beyond Competitive Devaluations : The Monetary Dimensions of Comparative Advantage

Bergin, Paul R. - 2019

Motivated by the long-standing debate on the pros and cons of competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country's international competitiveness. We refocus the analysis on the implications of monetary stabilization for a...

Persistent link: https://www.econbiz.de/10012871944

Productivity Spillovers, Terms of Trade and the "Home Market Effect"

Corsetti, Giancarlo; Martin, Philippe; Pesenti, Paolo A. - 2021

demand has macroeconomic implications that are similar to those of a reduction in firms' entry costs …

Persistent link: https://www.econbiz.de/10013220817

Multiproduct Multinationals and Reciprocal FDI Dumping

Ottaviano, Gianmarco I.P. - 2010

The global pattern of foreign direct investment (FDI) is quite similar to the world trade pattern. In particular, intraindustry FDI between rich nations is almost as pervasive as intraindustry trade among rich nations. In the standard' MNC model (of Markusen, Venables, Brainard, and others), FDI...

Persistent link: https://www.econbiz.de/10012763610

Firms, Contracts, and Trade Structure

Antras, Pol - 2021

Roughly one-third of world trade is intrafirm trade. This paper starts by unveiling two systematic patterns in the volume of intrafirm trade. In a panel of industries, the share of intrafirm imports in total U.S. imports is significantly higher, the higher the capital intensity of the exporting...

Persistent link: https://www.econbiz.de/10013247404

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