Head, Keith; Mayer, Thierry; Thoenig, Mathias - C.E.P.R. Discussion Papers - 2014
Quantifications of gains from trade in heterogeneous firm models assume that productivity is Pareto distributed … better fit to sales distributions—especially in the left tail. The cost of log-normal is that gains from trade depend on the … firm sales in a given market, the log-normal assumption delivers gains from trade in a symmetric two country model that can …