You are kindly invited to attend the Eesti Pankʼs research seminar on 30 January at 11:00 am, during which Mykola Ryzhenkov (University of Osnabrück) will present on “Financial frictions, markups and unilateral trade liberalization”. The co-authors of the study are Andrii Tarasenko and Volodymyr Vakhilov.
The authors study the response of a small open economy with credit constraints and variable markups to unilateral trade liberalization by a more developed trading partner. They use a dynamic heterogeneous agents model to quantify the welfare and allocative efficiency effects of unilateral increase in Ukraine’s market access to the EU in 2014. To obtain a better match with the data, they allow for variable markups in the domestic market, endogenous trade imbalances, and interest rate increasing with the level of foreign debt. The authors find that better market access improves welfare but lowers allocative efficiency in the economy, as reduction in markup dispersion is too weak to offset increase in capital misallocation. Variable markups exacerbate worsening allocative efficiency in the presence of credit constraints.
More information about Mykola Ryzhenkov: https://sites.google.com/view/mykolaryzhenkov
Meeting information in Microsoft Teams:
https://teams.microsoft.com/l/meetup-join/19%3ameeting_M2Y5ZWVmMWQtM2VmMC00ZmI4LThkYTgtNGFhNzY3MTlhM2Zi%40thread.v2/0?context=%7b%22Tid%22%3a%227612cc54-c497-4c75-8ece-146688e01419%22%2c%22Oid%22%3a%2234f7d67c-4c01-4f87-999e-db6bff5cc8d7%22%7d
Meeting ID: 385 179 756 607
Password: cE755vx7