Sylvia Xiaolin Xiao


Frictional Capital Reallocation I: Ex Ante Heterogeneity

Staff Working Paper 2019-4 Randall Wright, Sylvia Xiaolin Xiao, Yu Zhu
This paper studies dynamic general equilibrium models where firms trade capital in frictional markets. Gains from trade arise due to ex ante heterogeneity: some firms are better at investment, so they build capital in the primary market; others acquire it in the secondary market.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary Policy JEL Code(s): E, E2, E22, E4, E44

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