*We study the effect of productivity news on firm entry in the model with sunk costs and the possibility of entry delay. Analytically we show that good news increases the incentive to enter due to its effect on the expected firm value, but at the same time, it increases the incentive to delay entry until this news materializes. The presence of entry delay option results in a smaller effect of news on firm entry compared to the case with no such option. We evaluate our analytical insights in a quantitative news-driven RBC model, extended with irreversible firm entry and possibility of entry delay. In the calibrated model, we show that the presence of entry delay option is quantitatively important in determining the magnitude of the effect of productivity news on firm entry.

**Globalization stands out among the determinants of populism. Trade entails winners and losers, who has demanded direct redistribution (taxes) as compensation for their losses, especially in the advanced stages of globalization. Since 1990s demand for trade protection as a form of indirect redistribution has partially substituted direct redistribution. I develop a model showing that frictions in political institutions can explain this trend, impeding direct redistribution to offset the trade-induced losses. The main results are: (1) if gains from trade are sufficiently high, losers are better off under free trade than in autarky in a full democracy, (2) the effect of trade on demand for redistribution/protection is conditional on political capture. I further provide some preliminary empirical evidence of these results.