Gopinath, GitaNeiman, Brent2014-06-172014Gopinath, Gita, and Brent Neiman. 2014. Trade Adjustment and Productivity in Large Crises. American Economic Review 104, no. 3: 793–831.0002-8282http://nrs.harvard.edu/urn-3:HUL.InstRepos:12330899We 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.en-USJournal Article2014-06-1710.1257/aer.104.3.793