Labor Market Frictions, Firm Growth, and International Trade
NBER Working Paper No. 19492
This paper develops a model to study the aggregate effects of labor 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 gains from lowering frictions in job-to-job transitions are considerable, and may outweigh those from lowering frictions in hiring from unemployment.
This paper was revised on November 21, 2016
Document Object Identifier (DOI): 10.3386/w19492
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