Is the variation in bilateral trade flows across countries primarily due to differences in the number of exporting firms (the extensive margin) or in the average size of an exporter (the intensive margin)? And how does this affect the estimation and quantitative implications of the Melitz (2003) trade model? The benchmark Melitz model with Pareto-distributed firm productivity and fixed costs of exporting, predicts that, conditional on the fixed costs...
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INFORMATION
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2018/10/26
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Document de travail de recherche sur les politiques
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WPS8625
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1
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1
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2018/10/26
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Disclosed
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The Intensive Margin in Trade
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trade costs