New model predicts effects of monetary policy on global trade and welfare.
The article introduces a new economic model that looks at how money, consumer search behavior, and different types of companies interact in an open economy. The model shows how search difficulties in buying goods can give companies more power, but consumers can reduce this power by searching harder. The model also considers how firms of varying sizes can enter the market freely and how countries can trade goods and assets. The research suggests that monetary policies can affect production, firm entry, prices, trade, and overall well-being in different countries. The model also introduces a unique way to predict how many customers each firm will have, which can help understand sales patterns.