Barriers to firm growth in open economies

Slow Convergence in Economies with Firm Heterogeneity ∗

This paper presents a simple formula that relates the tail index of the firm size distribution to the aggregate speed with which an economy converges to its balanced growth path. The fact that there are so many firms in the right tail implies that aggregate shocks that permanently destroy employment among incumbent firms, rather than cause these firms to scale back temporarily, are followed by ...

Antitrust in Open Economies

We examine antitrust rules in a two county general equilibrium trade model, contrasting national and multilateral (cooperative) determination of competition policy, exploring the properties of policy equilibrium. It is not imperfect competition, but variation in competitive stance between sectors that matters for trading partners. Beggar-thy-neighbor competition policies relate to countries’ co...

Capitalist Diversity in Open Economies

Competition Policy in Open Economies

What is the e®ect of national antitrust policies in a world with international trade? Traditionally, economic analysis of mergers has assumed a closed economy, which as we show in this paper, may lead to errant policy in an open economy. We use a very simple model to highlight some key issues in optimal competition policy when trade is important, and compare the nationally optimal number of ̄rm...

Globalization and Inequality: Are Growth Regimes in Open Economies Bound to be Biased

The question we seek to analyze in the proposed conference is the pervasive phenomenon of inequality. More specifically, we want to examine the extent to which the observed increase in inequality in most developed democratic countries is politically and economically sustainable, whether this trend can be checked, and, if so, by what kind of alternative policies. The problem addressed here is cl...