Trade Adjustment and Productivity in Large Crises
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CitationGopinath, Gita, and Brent Neiman. 2014. Trade Adjustment and Productivity in Large Crises. American Economic Review 104, no. 3: 793–831.
AbstractWe empirically characterize the mechanics of trade adjustment during the Argentine crisis. Though imports collapsed by 70 percent from 2000-2002, the entry and exit of firms or products at the country level played a small role. The within-firm churning of imported inputs, however, played a sizeable role. We build a model of trade in intermediate inputs with heterogeneous firms, fixed import costs, and roundabout production. Import demand is non-homothetic and the implications of an import price shock depend on the full distribution of firm-level adjustments. An import price shock generates a significant decline in productivity.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:12330899
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