Gao, Xiang (2009): Macroeconomic Analysis on the Basis of Trade Theory: A Review Essay.
Download (225kB) | Preview
This paper reviews the branch of literature that applies models developed in international trade theory (Microeconomics) to explain phenomena found in international finance (Macroeconomics). Among all international trade models, the New New Trade Theory with productivity heterogeneity across firms in the same industry has proved to be a powerful tool to bridge the gap between international trade and finance. As a result, this review focuses on several papers in this nascent field, where the behavior of macroeconomic indicators are generated from sound microeconomic foundation.
|Item Type:||MPRA Paper|
|Original Title:||Macroeconomic Analysis on the Basis of Trade Theory: A Review Essay|
|English Title:||Macroeconomic Analysis on the Basis of Trade Theory: A Review Essay|
|Keywords:||Heterogeneous firm; Price fluctuation; Innovation|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
|Depositing User:||XIANG GAO|
|Date Deposited:||05. Nov 2009 16:04|
|Last Modified:||14. Feb 2013 15:21|
Alvarez, Fernando and Robert Jr. Lucas. 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade." Journal of Monetary Economics 54 (6): 1726-1768.
Atkeson, Andrew and Ariel Burstein. 2008. "Pricing-to-Market, Trade Costs, and International Relative Prices." The American Economic Review Forthcoming.
Atkeson, Andrew and Ariel Burstein. 2009. "Innovation, Firm Dynamics, and International Trade." Journal of Political Economy Revised and Resubmitted.
Atkeson, Andrew and Patrick J. Kehoe. 2000. "Paths of Development for Early- and Late-Bloomers in a Dynamic Heckscher-Ohlin Model." Federal Reserve Bank of Minneapolis. Research Department Staff Report 256.
Baldwin, Richard and Frederic Robert-Nicoud. 2008. "Trade and Growth with Heterogeneous Firms." Journal of International Economics 74: 21-34.
Bernard, Andrew, Jonathan Eaton, J. Bradford Jensen, and Samuel Kortum. 2003. "Plants and Productivity in International Trade." The American Economic Review 93 (4): 1268-1290.
Bernard, Andrew B., Stephen J. Redding, and Peter K. Schott. 2007. "Comparative Advantage and Heterogeneous Firms." Review of Economic Studies 74 (1): 31--66.
Bilbiie, Florin, Fabio Ghironi and Marc Melitz. 2007. "Monetary Policy and Business Cycles with Endogenous Entry and Product Variety." NBER Macroeconomics Annual 2007. Forthcoming.
Bulow, Jeremy and Kenneth Rogoff. 1989. "A Constant Recontracting Model of Sovereign Debt." Journal of Political Economy 97 (1): 155-78.
Chaney, Thomas. 2008. "Distorted gravity: The Intensive and Extensive Margins of International Trade." The American Economic Review 98 (4): 1707-1721.
Costantini, James and Marc Melitz. 2008. "The Dynamics of Firm-Level Adjustment to Trade Liberalization." The Organization of Firms in a Global Economy. Harvard University Press.
Dornbusch, Rudiger, S. Fisher, and P. Samuelson. 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods." The American Economic Review 67 (5): 823-39.
Eaton, Jonathan and Samuel Kortum. 2002. "Technology, Geography, and Trade." Econometrica 70 (5): 1741-1779.
Eaton, Jonathan and Samuel Kortum. 1999. "International Technology Diffusion: Theory and Measurement." International Economic Review 40 (3): 537-570.
Eaton, Jonathan and Samuel Kortum. 2006. "Innovation, Diffusion, and Trade." NBER Working Paper No. 12385.
Ghironi, Fabio and Marc Melitz. 2005. "International Trade and Macroeconomic Dynamics with Heterogeneous Firms." Quarterly Journal of Economics 120 (3): 865-915.
Helpman, E. and P. Krugman. 1985. "Market Structure and Foreign Trade." MIT Press.
Impullitti, Giammario and Omar Licandro. 2009. "Trade, Firm Selection, and Innovation: the Competition Channel." Working Paper.
Krugman, Paul. 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade." The American Economic Review 70 (5): 950-959
Melitz, Marc. 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity." Econometrica 71 (6): 1695-1721.
Melitz, Marc and Giancarlo Ottaviano. 2008. "Market Size, Trade, and Productivity." Review of Economic Studies 75 (1): 295-316.
Mendoza, Enrique G. and Vivian Z. Yue. 2008. "A Solution to the Default Risk-Business Cycle Disconnect." Working Paper.
Redding, Stephen. 1999. "Dynamic Comparative Advantage and the Welfare Effects of Trade." Oxford Economic Papers 51: 15-39.
Rose, Andrew K., and Mark M. Spiegel. 2002. "A Gravity Model of Sovereign Lending: Trade, Default and Credit." NBER Working Paper No. 9285.