A Tale of Two Tails: Productivity Distribution and the Gains from Trade

Arbeitspapier

I use firm-level data to show that neither the Log-normal nor the Pareto distribution can approximate the shape of the productivity distribution along the entire support. While the former underpredicts the thickness of the right tail, the latter does not capture the shape of the left one. Using empirical distribution as a benchmark, I show that such inaccuracies lead to sizable errors in the estimates of the gains from trade in models featuring firm selection. I propose using a mixed distribution which models the left tail as Log-normal and right tail as Pareto and produces negligible errors in quantitative analysis.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 5808

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Trade: General ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
• Thema: productivity distribution ; welfare gains ; international trade ; Pareto tail

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Nigai, Sergey K.
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/130426
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ