Question
The study of Eaton Kortum and Kramarz(2011) find that the Melitz (2003) model, with parsimonious modication, succeeds in explaining the basic features of such data
"The study of Eaton Kortum and Kramarz(2011) find that the Melitz (2003) model, with parsimonious modication, succeeds in explaining the basic features of such data along a large number of dimensions: entry into markets, sales distributions conditional on entry, and the link between entry and sales in individual foreign destinations and sales at home. Not only does the framework explain the facts, but it also provides a link between rm-level and aggregate observations that allows for a general-equilibrium ex-amination of the effect of aggregate shocks on individual rms." Explain the statement with help of the study by Eaton Kortum and Kramarz (2011). Use the main model used by them and state that how they arrived at these findings.
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