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Microeconomic Uncertainty, International Trade, and Aggregate Fluctuations / George Alessandria, Horag Choi, Joseph P. Kaboski, Virgiliu Midrigan.
- Format:
- Book
- Author/Creator:
- Alessandria, George.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20616.
- NBER working paper series no. w20616
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- The extent and direction of causation between micro volatility and business cycles are debated. We examine, empirically and theoretically, the source and effects of fluctuations in the dispersion of producer- level sales and production over the business cycle. On the theoretical side, we study the effect of exogenous first- and second-moment shocks to producer-level productivity in a two-country DSGE model with heterogenous producers and an endogenous dynamic export participation decision. First-moment shocks cause endogenous fluctuations in producer-level dispersion by reallocating production internationally, while second-moment shocks lead to increases in trade relative to GDP in recessions. Empirically, using detailed product-level data in the motor vehicle industry and industry-level data of U.S. manufacturers, we find evidence that international reallocation is indeed important for understanding cross-industry variation in cyclical patterns of measured dispersion.
- Notes:
- Print version record
- October 2014.
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