I study the aggregate implications of the entry of Multinational Firms (MNFs) in a two country Dynamic Stochastic … General Equilibrium model in which firms have heterogeneous productivity in the sense of Ghironi and Melitz (2005). Unlike the … extant open economy macroeconomics literature, this model endogenizes both multinational production and exports as possible …

This research sheds light on the role of multinational production on the type of innovation performed by firms. We … spread across different product lines. We focus on two features of multinational production: (i) core knowledge is …