Abstract
I study the aggregate effects of labour market frictions in a small open economy where firms grow slowly and make fixed export investments. The model features interactions between dynamic investments in exporting and search frictions with job-To-job mobility. A calibration to Argentina's economy matching data on firm growth, worker transitions between firms, and export dynamics suggests that the real income gains from lowering frictions in job-To-job transitions are about seven times larger than comparable reductions in frictions from unemployment. Barriers to worker mobility across firms matter for the real income gains of trade-cost reductions.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1213-1260 |
| Number of pages | 48 |
| Journal | Review of Economic Studies |
| Volume | 87 |
| Issue number | 3 |
| DOIs | |
| State | Published - May 1 2020 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
Keywords
- Firm growth
- International trade
- Job-To-job transitions
- Labour market frictions