National Tsing Hua University
Department of Economics
Information about this author at RePEc
NBER Working Papers and Publications
|May 2014||Financial Frictions and Firm Dynamics|
with Paul Bergin, Ling Feng: w20099
Firm entry dynamics are an integral part of the propagation of financial shocks to the real economy. A VAR documents that adverse financial shocks in the U.S. postwar period are associated with a fall in new firm creation and a fall in firm equity values. We propose a DSGE model with endogenous firm entry and financial frictions that is able to explain these facts. The model is novel in giving firms a choice of financing up-front entry costs through a combination of debt as well as equity, so that financial shocks directly impact the financing of firm entry. The model is also novel in making use of the asset pricing implications of the firm entry condition to explain the equity price response to a financial shock. The model indicates that free entry of new firms limits the ability of incum...
|August 2010||The Dynamic Effects of Currency Union on Trade|
with Paul Bergin: w16259
A currency union's ability to increase international trade is one of the most debated questions in international macroeconomics. This paper studies the dynamics of these trade effects. First, an empirical study of the European Monetary Union finds that the extensive margin of trade (entry of new firms or goods) responds several years ahead of overall trade volume. This implies that the intensive margin (previously traded goods) falls in the run-up to EMU. The paper's theoretical contribution is to study the announcement of a future monetary union as a news shock to trade costs in the context of a dynamic stochastic general equilibrium trade model. Early entry of new firms in anticipation is explainable as a rational forward-looking response under certain conditions, where essential element...
Published: Bergin, Paul R. & Lin, Ching-Yi, 2012. "The dynamic effects of a currency union on trade," Journal of International Economics, Elsevier, vol. 87(2), pages 191-204. citation courtesy of
|April 2009||Exchange Rate Regimes and the Extensive Margin of Trade|
with Paul R. Bergin
in NBER International Seminar on Macroeconomics 2008, Jeffrey Frankel and Christopher Pissarides, organizers
|June 2008||Exchange Rate Regimes and the Extensive Margin of Trade|
with Paul R. Bergin: w14126
This paper finds that currency unions and direct exchange rate pegs raise trade through distinct channels. Panel data analysis of the period 1973-2000 indicates that currency unions have raised trade predominantly at the extensive margin, the entry of new firms or products. In contrast, direct pegs have worked almost entirely at the intensive margin, increased trade of existing products. A stochastic general equilibrium model is developed to understand this result, featuring price stickiness and firm entry under uncertainty. Because both regimes tend to reliably provide exchange rate stability over the horizon of a year or so, which is the horizon of price setting, they both lead to lower export prices and greater demand for exports. But because currency unions historically are more durab...
Published: Exchange Rate Regimes and the Extensive Margin of Trade, Paul R. Bergin, Ching-Yi Lin. in NBER International Seminar on Macroeconomics 2008, Frankel and Pissarides. 2009