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Identifier to cite or link to this item: https://hdl.handle.net/10086/29005

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Title
A Solution to the Melitz-Trefler Puzzle
Creator
Creator Name
SEGERSTROM, Paul S. SEGERSTROM, Paul S.
Affiliation
Affiliation Name
Stockholm School of Economics
Creator Name
SUGITA, Yoichi SUGITA, Yoichi
杉田, 洋一 杉田, 洋一
Affiliation
Affiliation Name
Hitotsubashi University
Editor
Contributor Name
Hitotsubashi Institute for Advanced Study, Hitotsubashi University
Key Word
Trade liberalization
firm heterogeneity
industrial productivity
JEL
F12
F13
Abstract
The empirical finding by Trefler (2004, AER) and others that industrial productivity increases more strongly in liberalized industries than in non-liberalized industries has been widely accepted as evidence for the Melitz (2003, Econometrica) model. But it is actually evidence against the Melitz model. Segerstrom and Sugita (2015, JEEA) showed that under very general assumptions, the multi-industry Melitz model predicts that productivity increases more strongly in non-liberalized industries than in liberalized industries. This disconnect between theory and evidence we call the Melitz-Trefler Puzzle. This paper presents a solution to the Melitz-Trefler puzzle, a new model consistent with the Trefler finding.
Publisher
Hitotsubashi Institute for Advanced Study, Hitotsubashi University
Issued Date
2018-01
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion paper series ; No. HIAS-E-63
Number of Pages
24
Appears in Collections
Discussion paper series / Hitotsubashi Institute for Advanced Study, Hitotsubashi University
URL
https://hdl.handle.net/10086/29005