This course overviews the recent literature emphasizing how the microeconomic structure of economic activities shapes a number of aggregate outcomes. It more specifically discusses the role of the “granularity'' of economic systems, i.e. the consequences of the distribution of firms' size being fat-tailed, and the impact of production networks for the transmission of shocks across firms. The impact of these microeconomic features for aggregate fluctuations is first discussed in a closed-economy context. Then, we discuss a number of extensions of this literature to the open economy. The second half of the course is devoted to the particular structure of firm-to-firm trade networks in an international context.
The pre-requisite for this course is the “International Trade” course.
The plan of the course can evolve slightly with the evolution of the most recent research on the topic
Chapter 1: Granularity in international markets
Chapter 2: Linkages in international markets
Chapter 3: Trade Networks: Static Framework
Chapter 4: Trade Networks: Dynamic Framework
The list of papers will be included into the slides. A non-exhaustive list is provided below
– Gabaix (2011) "The Granular Origin of Aggregate Fluctuations", Econometrica
– Acemoglu (2012) "The Network Origins of Aggregation Fluctuations", Econometrica
– di Giovanni, Levchenko and Mejean (2014) "Firms, Destinations, and Aggregate Fluctuations", Econometrica
– di Giovanni and Levchenko (2012) "Country Size, International Trade, and Aggregate Fluctuations in Granular Economies", Journal of Political Economy
– di Giovanni, Levchenko and Mejean (2018) "The Micro Origins of International Business Cycle Comovements", American Economic Review
– Bernard, Moxnes, Ulltveit-Moe (2018) "Two-Sided Heterogeneity and Trade", Review of Economics and Statistics
– Lenoir, Martin, Mejean (2018) "Search Frictions in International Good Markets", mimeo