FDI and Firm Productivity: A Comprehensive Review of Macroeconomic and Microeconomic Models

Fdi and the Dynamics of Productivity: Microeconomic Evidence

This paper examines productivity growth in the Indonesian manufacturing sector. We use a longitudinal data set to calculate the effects on aggregate manufacturing productivity growth from improvements within establishments, from reallocation of market shares, and from the turnover of plants. The difference between domestic and foreign owned plants is examined together with a calculation of the ...

Macroeconomic Evidence and Microeconomic Foundations

Macroeconomic forecasts and microeconomic forecasters

In the presence of principal-agent problems, published macroeconomic forecasts by professional economists may not measure expectations. Forecasters may use their forecasts in order to manipulate beliefs about their ability. I test a cross-sectional implication of models of reputation and information-revelation. I find that as forecasters become older and more established, they produce more radi...

Price Rigidity: Microeconomic Evidence and Macroeconomic Implications

We review recent evidence on price rigidity from themacroeconomics literature and discuss how this evidence is used to inform macroeconomic modeling. Sluggish price adjustment is a leading explanation for the large effects of demand shocks on output and, in particular, the effects of monetary policy on output. A recent influx of data on individual prices has greatly deepenedmacroeconomists’ und...

Choice for FDI and Post-FDI Productivity

We highlight the difference between the service sector and the manufacturing sector in regard to the determinants for a firm to start FDI and the productivity growth it achieves. This paper analyzes two questions: (1) whether a certain level of productivity explains a Japanese firm’s choice to be a multinational firm (by starting FDI), and (2) how the productivity of such a multinational firm c...