Skip to main content

The Opportunity Costs of Entrepreneurs in International Trade

Staff Report 533 | Published August 1, 2016

Download PDF

Authors

Timothy J. Kehoe Consultant, University of Minnesota, and National Bureau of Economic Research
Pau S. Pujolàs McMaster University
Kim J. Ruhl University of Wisconsin and National Bureau of Economic Research
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.


Published in: _Economics Letters_ (Vol. 146, 2016, pp. 01-03) https://doi.org/10.1016/j.econlet.2016.07.012.