Title

Dynamics of Firms and Trade in General Equilibrium

Author(s)

Robert Dekle Robert Dekle (University of Southern California)

Hyeok Jeong Hyeok Jeong (KDI School of Public Policy and Management)

Nobuhiro Kiyotaki Nobuhiro Kiyotaki (Princeton University)

Abstract

This paper develops a dynamic general equilibrium model that attempts to reconcile the observation that aggregate movements of exports and imports are disconnected from real exchange rate movements, while firm-level exports co-move significantly with the real exchange rate. Firms are heterogenous, 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.

Creation Date

2014-03

Section URL ID

Paper Number

2014-3

URL

http://www.princeton.edu/~kiyotaki/papers/DJK_March12_2014(1).pdf

File Function

Jel

F10, F19

Keyword(s)

General Equilibrium Model, Exchange Rate, Exports and Imports, Japan

Suppress

false

Series

13