The Opportunity Costs of Entrepreneurs in International Trade
Abstract: We show that a trade model with an exogenous set of heterogeneous firms with fixed operating costs has the same aggregate outcomes as a span-of-control model. Fixed costs in the heterogeneous-firm model are entrepreneurs' forgone wage in the span-of-control model.
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Description: Full text
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Staff Report
Publication Date: 2016-08-01
Pages: 10 pages