Trade liberalization and firm dynamics
By: Ariel Burstein, Marc J. Melitz
Contributors: Melitz, Marc J.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16960; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16960.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "In this paper, we analyze the transition dynamics associated with an economy's response to trade liberalization.  We start by reviewing the recent literature that incorporates firm dynamics into models of international trade.  We then build upon that literature to characterize the role of firm dynamics, export-market selection, firm-level innovation, and firms' expectations regarding the time path of liberalization in generating those transition dynamics following trade liberalization.  These modeling ingredients generate substantial aggregate transition dynamics as they shift and shape the endogenous distribution of firms over time.  Our results show how the responses of trade volumes, innovation, and aggregate output can vary greatly over time depending on those modeling ingredients.  This has important consequences for many issues in international economics that rely on predictions for the effects of globalization over time on those key aggregate outcomes"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/23/2011.

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