We show that, in heterogeneous-firm international trade models, common forms of heterogeneity and uncertainty drive a (multiplicative random) wedge between the observable exports distribution and the latent distribution of firm productivity. Even if the latter is exactly Pareto distributed, this...

One of the main issues in the statistical literature of extremes concerns the tail index estimation, closely linked to the determination of a threshold above which a Generalized Pareto Distribution (GPD) can be fi tted. Approaches to this estimation may be classifi ed into two classes, one using...