Trade Adjustment and Productivity in Large Crises

Gita Gopinath and Brent Neiman

Scholarly Articles from Harvard University Department of Economics

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.

Date: 2014
New Economics Papers: this item is included in nep-bec, nep-int and nep-opm
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Published in American Economic Review

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http://dash.harvard.edu/bitstream/handle/1/12330899/74522782.pdf (application/pdf)

Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:12330899

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