Trade Adjustment and Productivity in Large Crises

Gita Gopinath and Brent Neiman

American Economic Review, 2014, vol. 104, issue 3, 793-831

Abstract: We 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.

JEL-codes: F14 F31 F43 L60 O14 O19 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.3.793
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Citations: View citations in EconPapers (197)

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Related works:
Working Paper: Trade Adjustment and Productivity in Large Crises (2014)
Working Paper: Trade adjustment and productivity in large crises (2011)
Working Paper: Trade Adjustment and Productivity in Large Crises (2011)
Working Paper: Trade Adjustment and Productivity in Large Crises (2011)
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