Dynamics of Firms and Trade in General Equilibrium

70 Pages Posted: 31 Dec 2013

See all articles by Robert Dekle

Robert Dekle

University of Southern California - Department of Economics

Hyeok Jeong

KDI School of Public Policy and Management

Nobuhiro Kiyotaki

Princeton University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2013

Abstract

This paper develops a dynamic general equilibrium model that tries to reconcile the observation that aggregate movements of exports and imports are "disconnected" from real exchange rate movements, while Â…firm-level exports co-move significantly with the real exchange rate. Firms are heterogeneous, facing recurrent aggregate and firm-product specific productivity shocks, choose which goods to export, and decide to enter and exit the business endogenously. We calibrate and estimate the model with both aggregate and firm level data from Japan.

Suggested Citation

Dekle, Robert and Jeong, Hyeok and Kiyotaki, Nobuhiro, Dynamics of Firms and Trade in General Equilibrium (June 2013). KDI School of Pub Policy & Management Paper No. 13-06. Available at SSRN: https://ssrn.com/abstract=2372988 or http://dx.doi.org/10.2139/ssrn.2372988

Robert Dekle

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States
213-740-8335 (Phone)

Hyeok Jeong (Contact Author)

KDI School of Public Policy and Management ( email )

P.O. Box 184
Seoul, 130-868
Korea, Republic of (South Korea)
+82-2-880-2921 (Phone)
+82-2-879-1496 (Fax)

Nobuhiro Kiyotaki

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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