Firm Heterogeneity, Labor Markets and International Trace

The new macroeconomics is about distributions and flows, rather than points and intersections. Market frictions imply that the search for trading partners is time consuming and costly. Consequently, market participants flow between economic states, and trades occur at dispersed prices. This generates motives for continued search for better market opportunities, and for bargaining between potential trading partners. This volume takes the empirical analysis of markets with frictions to a new level by using unique merged registers from Denmark on firm accounting data, individual employee data, and international trade data to estimate empirically the relevant flow rates, dispersions, and relations among key variables of interest, including productivity, firm size, wages, exports, growth, and unemployment. The results serve to inform researchers and policy makers about the functioning of markets, justify the interpretation of dispersion and flows as equilibrium outcomes, and provide an understanding of cycles, adjustment, and potentials for public policy.

Henning Bunzel is Associate Professor of Economics at Aarhus University, Denmark. He has also taught at Aalborg University. He received his degree in Economics from Aarhus University. Bent Jesper Christensen is Professor of Economics at Aarhus University, Denmark. He has also taught at Cornell University, Harvard University, and New York University. He received his Ph.D. in Economics from Cornell University. Dale T. Mortensen is Board of Trustees Professor and Professor of Economics at Northwestern University, and Professor of Economics at Aarhus University, Denmark. He has also taught at California Institute of Technology, Cornell University, Hebrew University, New York University, and University of Essex. He received his Ph.D. in Economics from Carnegie-Mellon University. He is a research associate of the National Bureau of Economic Research (NBER), a research fellow of the Institute for the Study of Labor (IZA), and a fellow of the Econometric Society, the American Academy of Arts and Sciences, the Society of Labor Economics, and the European Economic Association. He was awarded the IZA Labour Economics Prize in 2005 and the Society of Labor Economists’ (SOLE) Mincer Prize in 2007. In 2008 he was elected an American Economic Association Distinguished Fellow, and in 2010 he was awarded the Nobel Prize in Economic Sciences.