EconPapers    
Economics at your fingertips  
 

Microeconomic Uncertainty, International Trade, and Aggregate Fluctuations

George Alessandria (), Horag Choi (), Joseph Kaboski and Virgiliu Midrigan ()

No 20616, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: E31 F12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-mac and nep-opm
Date: 2014-10
Note: AP EFG IFM ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published as Alessandria, George & Choi, Horag & Kaboski, Joseph P. & Midrigan, Virgiliu, 2015. "Microeconomic uncertainty, international trade, and aggregate fluctuations," Journal of Monetary Economics, Elsevier, vol. 69(C), pages 20-38.

Downloads: (external link)
http://www.nber.org/papers/w20616.pdf (application/pdf)

Related works:
Journal Article: Microeconomic uncertainty, international trade, and aggregate fluctuations (2015) Downloads
Working Paper: Microeconomic uncertainty, international trade, and aggregate fluctuations (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20616

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20616

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-07-21
Handle: RePEc:nbr:nberwo:20616