Risky Gravity

• 成果类型: Article
• 署名作者: Juvenal, Luciana; Monteiro, Paulo Santos
• 署名单位: International Monetary Fund; University of York - UK
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvad060
• 发表日期: 2023
• 页码: 1590-1627
• 关键词: trade; uncertainty; INVESTMENT; BUSINESS; FIRMS; exports; CRISIS; IMPACT

摘要

We consider the canonical trade model with heterogeneous firms, love for variety and trade costs, and integrate it in the consumption CAPM model. This yields a structural gravity equation that includes an additional factor related to risk premia. Empirical evidence based on firm-level data confirms the importance of cross-sectional heterogeneity in risk and time-varying risk premia to shape bilateral trade flows. The structural gravity model augmented to account for fluctuations in risk premia offers a compelling explanation for trade collapses during abrupt economic downturns.