Download or read book Essays on Firms Heterogeneity and Business Cycles written by Andrea Alati and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Heterogeneous Firms in International Economics written by Konstantinos Costas Arkolakis and published by . This book was released on 2007 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Interaction and Market Structure written by Domenico Delli Gatti and published by Springer Science & Business Media. This book was released on 2000-03-27 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a collection of essays which examine how the properties of aggregate variables are influenced by the actions and interactions of heterogenous individuals in different economic contexts. The common denominator of the essays is a critique of the representative agent hypothesis. If this hypothesis were correct, the behaviour of the aggregate variable would simply be the reproduction of individual optimising behaviour. In the methodology of the hard sciences, one of the achievements of the quantum revolution has been the rebuttal of the notion that aggregate behaviour can be explained on the basis of the behaviour of a single unit: the elementary particle does not even exist as a single entity but as a network, a system of interacting units. In this book, new tracks in economics which parallel the developments in physics mentioned above are explored. The essays, in fact are contributions to the analysis of the economy as a complex evolving system of interacting agents.

Download or read book Essays on firm heterogeneity and quality in international trade written by Eddy Bekkers and published by Rozenberg Publishers. This book was released on 2008 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: The thesis is organized as follows. Chapter 2 contains a survey of the three most in‡fluential models on fi…rm heterogeneity and of the most important empirical work on firrm heterogeneity. The chapter starts with a brief review of the homogeneous productivity imperfect competition literature. Chapter 2 …finishes with a comparison of the three most in‡fluential models of fi…rm heterogeneity and the oligopoly model put forward in the thesis. Chapter 3 addresses exporting uncertainty under heterogeneous popularity. Chapter 4 contains the chapter on …firm heterogeneity under oligopoly. Chapter 5 constitutes the models on …firm heterogeneity and endogenous quality. Chapter 6 points out the within-sector specialization model. Chapter 7 addresses the effect of importer characteristics on unit values and the role of markups and quality to explain this effect. Chapter 8 concludes.

Download or read book Essays on Business Cycles and Dynamic Stochastic General Equilibrium Models with Heterogeneous Agents written by Jonghyeon Oh and published by . This book was released on 2014 with total page 95 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on business cycles and dynamic stochastic general equilibrium models with heterogeneous agents. Micro-data either for households or for firms are important sources to understand macroeconomic movements. Heterogeneous agent models are useful tools to study the implications of microeconomic aspects of economy on macroeconomy.

Download or read book Essays on Macroeconomics with Plant Heterogeneity written by Jinhee Woo and published by . This book was released on 2016 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The theme of this thesis is to understand the role of plant heterogeneity in shaping the dynamics of aggregate economy along business cycles. The first chapter investigates the cyclicality of plant entry and exit and its role in shaping the dynamics of aggregate economy along business cycles. The second chapter provides micro founded explanations regarding the dynamics of capital utilization in response to the news shock. The United States establishment exit rate is acyclical. This poses a challenge to canonical models of industry dynamics-e.g., Hopenhayn (1992), which imply a strongly counter-cyclical exit rate. To reconcile this gap between theory and data, imperfect information is introduced. Potential entrants have imperfect information about their productivity, leading to a signal extraction problem. When the volatility of idiosyncratic productivity dominates that of aggregate, as we observe in the micro data, potential entrants overestimate their productivity, and the value of entering, in booms. This amplified entry further increases factor prices and crowds out marginal incumbents, making the exit rate almost acyclical. The imperfect information mechanism proposed here also yields three testable implications: (i) entry is more cyclical in the industries where idiosyncratic components dominate; (ii) plant entry by new firms is more cyclical than that by existing firms; (iii) plants established by new firms during booms are more likely to exit rapidly. We show that all three predictions are consistent with the data. In the second chapter, by estimating a panel VAR on two-digit manufacturing data using the identification scheme proposed by Beadury and Portier (2006), I find positive co-movement between investment and capital utilization (the workweek of capital) in response to a news shock. This is inconsistent with the canonical q-theory model of capital adjustment dynamics where good news about the future raises the marginal value of capital and leads the firm to preserve its capital for later use through less utilization today. With fixed costs in capital adjustment, plants make discrete, or "lumpy", adjustments such that if plants are subject to decreasing returns, q declines as they near the point of investment. Since good news makes large investments more likely, this triggers a fall in q and reduces the opportunity cost of utilization. To simultaneously explain the co-movement of investment and capital utilization with plant level investment behavior, I propose a heterogeneous plant model that combines fixed adjustment costs and an endogenous capital utilization choice. When the model economy is calibrated to match salient features of the plant level investment rate distribution, it generates positive co-movement between investment and capital utilization."--Pages v-vi.

Download or read book Essays in Heterogeneous Agent Monetary Economics written by Christian D. Bustamante Amaya and published by . This book was released on 2019 with total page 119 pages. Available in PDF, EPUB and Kindle. Book excerpt: In these essays, I study the interplay of monetary policy with agent heterogeneity in economies with frictional markets. While accounting for the heterogeneity observed at the micro level, I investigate the implications of having persistent differences in firms and households' balance sheets and their consequences for business cycle fluctuations in monetary economies during both normal times and in times of economic distress. In the first chapter, “Debt Overhang, Monetary Policy, and Economic Recoveries After Large Recessions”, I explore why conventional monetary policy was so ineffective in mitigating the severity of the 2007 U.S. recession and unsuccessful thereafter in stimulating aggregate demand. Linking firm-level data with predictions from a model, I show that accounting for individual firms’ debt structures is crucial in explaining why business investment fell so dramatically through the recession and remained low for several years, despite the Federal Reserve repeatedly cutting its target interest rate until conventional policy tools were exhausted. Using a sample of publicly traded firms, I establish that firms with greater long-term debt exposure experienced larger contractions and slower recoveries in their investment expenditure. Next, I show that debt overhang episodes were unusually prevalent over the years following the onset of the recession, and particularly so among firms relying more heavily on long-maturing debt. To understand these microeconomic observations and their implications for aggregates, I develop a New Keynesian model where heterogeneous firms finance investment using defaultable nominal long-term debt and where the central bank faces an explicit zero lower bound constraint. There, the greater a firm’s leverage, the higher its likelihood of experiencing a debt overhang episode following a large aggregate shock. Moreover, the severity of debt overhang problems, and their consequences for the distribution and level of aggregate investment, compounds with (1) an increased real value of debt, i.e., debt deflation, and (2) the monetary authority’s inability to restore inflation once nominal interest rates reach the zero lower bound. Together, firms’ long maturity debt positions and the binding zero lower bound are critical in transmitting the consequences of a deep recession into a remarkably anemic recovery in aggregate investment.

Download or read book Essays on Macroeconomic Policies in Heterogeneous Agent Models written by Alaïs Martin-Baillon and published by . This book was released on 2021 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is now recognized that the heterogeneity of economic agents plays a crucial role in understanding the fluctuations of an economy. The different chapters of my thesis serve the same question: How does heterogeneity changes the way economic policies should be conducted? Today, heterogeneous-agent macroeconomics is developing in several directions, each shedding different light on the problems we face as economists. My thesis is at the confluence of the different facets of this field. The first chapter of my thesis, participates in the heterogeneous agent macroeconomics that derives analytical solutions in reduced-heterogeneity models. I study how governments should increase or decrease taxes on firms over the business cycle. I show that taking into account firms heterogeneity greatly changes tax policy recommendations. The second chapter of my thesis is part of quantitative heterogeneous agent macroeconomics. We study whether monetary policy should use its ability to redistribute wealth among heterogenous households to achieve its objectives. The third chapter of my thesis participates in field that uses micro data to understand macroeconomics and to design public policies. I estimate firms' propensities to invest to better understand how economic policies can vary firms' investment by varying their income.

Download or read book Essays on International Trade and Business Cycles written by Daisoon Kim and published by . This book was released on 2019 with total page 149 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research investigates how international trade and business cycles vary with characteristics of industries. The first chapter documents cost side industry heterogeneity across narrowly defined industries. The second and third chapters study the short run (international business cycle) and long run (home market effect) phenomenon, respectively. The research contributes to a better understanding of how the supply side industry heterogeneity plays a vital role in international trade and macroeconomics. The first chapter provides a method to estimate the cost structure. The approach relies on cost minimization and free entry condition with frictions, which allows decomposing sources of economies of scale into a sloping marginal cost curve and fixed cost. The US manufacturing industry data show that industry-level economies of scale are more strongly associated with marginal costs than fixed costs. The second chapter shows that the industry's international business cycle patterns vary systemically by the slopes. In industries with decreasing marginal costs, output, imports, and exports are all more correlated with aggregate GDP than in industries with increasing marginal costs. To rationalize the observed patterns, this chapter introduces sloping marginal cost curves and their variations across industries in an open economy macroeconomic model. It delivers endogenous export gains/losses and within-firm links between domestic and export markets which generate two attractive features of the model: (i) it raises model-implied cross-country aggregate GDP comovements which are close to the data, and (ii) it reproduces observed industrial international business cycle patterns. The results suggest that sloping marginal cost curves and their heterogeneity are informative to understand the international business cycle. The third chapter studies how industry characteristics determine the home market effect: the impact of country size on trade surplus and the location of industries. This chapter constructs a two-country multi-industry new trade model that allows for various supply- and demand-side industry characteristics. A novel feature of the model is that economies of scale arise not just from fixed costs, but also from sloping marginal cost curves. The model predicts that large countries have a higher concentration of industries in which (i) marginal costs are an important source of economies of scale, and (ii) products are more differentiated. This chapter tests these theoretical predictions using a gravity-based specification and introduces instrumental variables to fix measurement error and proxy problems. The empirical results are consistent with the main predictions of the model. The results show that the primary building blocks of new trade theory, economies of scale and product differentiation, are central to understanding international trade patterns in narrowly defined industries. The research supposes that a non-linear cost function and variations in cost structure across industries improve our understanding of international trade and business cycles.

Download or read book Essays on Environmental Policies Heterogeneous Firms Labor Market Dynamics and Inflation written by Zhe Li and published by . This book was released on 2009 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis covers three issues: the aggregate and welfare effects of environmental policies when plants are heterogeneous; what causes the different patterns of employment dynamics in small versus large firms over business cycles; and the welfare costs of expected and unexpected inflation.In the first chapter, we show that accounting for plant heterogeneity is important for the evaluation of environmental policies. We develop a general equilibrium model in which monopolistic competitive plants differ in productivity, produce differentiated goods and choose optimally a discrete emission-reduction technology. Emission-reduction policies affect both the fraction of plants adopting the advanced emission-reduction technology and the market shares of those with high levels of productivity. Calibrated to the Canadian data, the model shows that the aggregate costs of an emission tax to implement the Kyoto Protocol are 40 percent larger than the costs that would result with homogenous plants.In the second chapter, we incorporate labor search frictions into a model with lumpy investment to explain a set of firm-size-related facts about the United States labor market dynamics over business cycles. Contrary to the predictions of standard models, we observe that job destruction is procyclical in small firms but countercyclical in large ones. Calibrated to U.S. data, the model generates this asymmetric pattern of employment dynamics in small versus large firms. This is because a favorable aggregate productivity shock tightens the labor market. A tighter labor market hurts investing small firms. As a result, workers move from small to large firms during booms.In the third chapter, we analyze the welfare costs of inflation when money is essential to facilitate trades among anonymous agents and information about nominal shocks is incomplete as in Lucas (1972). In the model, the transactions in which money is essential coincide with those in which agents are affected by monetary shocks. Consequently, the average value of money and its variation in value in different markets affect agents simultaneously when the supply of money changes. Calibrated to U.S. data, we find that the welfare costs of expected inflation are almost three orders higher than the welfare costs of unexpected inflation.

Download or read book Essays on Environmental Policy Heterogeneous Firms Employment Dynamics and Inflation written by Zhe Li and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Firm Heterogeneity and Regional Development written by Hisamitsu Saito and published by . This book was released on 2008 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this dissertation is to theoretically and empirically examine the role of firm heterogeneity in terms of productivity and skill-intensity in the agglomeration process and the effect of agglomeration on regional economic development. In the first essay, I analyze the effect of trade liberalization on agglomeration of high- and low-productivity firms and the consequences for regional economic development. By extending a new-economic-geography model, I find that competition, domestic and international, disperses low-productivity firms to less-developed regions. Trading with advanced countries also appears to bring about dispersion of economic activity. However, attempts by less-developed regions to provide monetary incentives are less likely to attract high-productivity firms. In the second essay, I empirically test the hypothesis that high-productivity (exporting) plants in Chile self-select to locate in large markets. Plants' raw productivity, i.e., productivity independent of agglomeration economies, is computed to obtain regional productivity-distribution measures. I find that high-productivity (exporting) plants indeed locate in a region where other plants in the same industry agglomerate, industrial structure is diversified and market size is large. Finally, plants' self-selection outweighs the contribution of agglomeration economies in increasing a region's productivity. In the third essay, I identify the mechanism by which human-capital spillovers occur at the plant-level and examine the relationship between spillovers and agglomeration of high skill-intensive plants in Chile. I employ plant-level production functions incorporating the absorptive capacity hypothesis, i.e., high skill-intensive plants benefit more from human-capital spillovers than others. Empirically, in 5 out of 8 manufacturing industries, the benefit from spillovers is larger in high skill-intensive plants. Plant entry and exit are also affected by spillovers resulting in regional skill disparities. The results of the three essays reveal locational preferences of various types of firms. Policy options for economic development through increases in regional productivity include specializing in targeted industry, diversifying regional industrial structure, enlarging the market size and workforce education. The results of this dissertation help local governments to evaluate of the benefits from each policy option, which when compared with their knowledge of costs, aid in the selection of an effective policy to improve regional well-being.

Download or read book Essays in Business and Macroeconomics written by Cody Frederick Kallen and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: My research has broadly focused on firm heterogeneity and its macroeconomic implications. Firm heterogeneity can generate important macroeconomic effects and interact with policies in ways that cannot be achieved by models of representative firms. This theme characterizes the research in this dissertation. In the first chapter, I show that profit shifting increases investment in both high-tax and low-tax countries by reducing the distortive effects of corporate income taxes. This interaction increases business cycle correlations between high-tax and low-tax countries and decreases them between high-tax and other high-tax countries. I find direct supportive evidence for the interaction between profit shifting and investment, and I provide causal evidence supporting the business cycle effects using an event study. In equilibrium, eliminating profit shifting would increase U.S. corporate tax revenue but decrease it in tax havens and the rest of the world; the investment response to this would decrease investment in the U.S. and in tax havens. The second chapter explores how multinational production, profit shifting and offshoring change optimal corporate tax designs, which consist of the tax rate, the treatment of the normal return on capital, and the tax system for multinationals. The model produces four "beggar-thy-neighbor" policy externalities. Profit shifting and offshoring lead to lower tax rates relative to socially optimal, while redistribution from foreign shareholders and partially internalized gains from cross-border activities lead to higher tax rates. Tax competition may not reduce corporate tax rates, as governments can respond by switching between tax systems. Because of these policy externalities, tax competition could increase or decrease welfare. In theory, markets clear in equilibrium; in practice, they don't. Goods-producing firms can stock out of goods to sell, leaving some customers empty-handed. These mismatches between supply and demand became particularly salient during the Covid pandemic. In this chapter, I develop a model of demand and supply mismatches based on imperfect forecasting of idiosyncratic demand shocks. Shortages create unpriced welfare losses for consumers, and inefficient overproduction and overpricing by firms. The estimated model matches external data on stockout rates historically and during the pandemic, it and explains why consumer sentiment remained depressed in 2021.

Download or read book Firm Heterogeneity Endogenous Entry and the Business Cycle written by Gianmarco I. P. Ottaviano and published by . This book was released on 2011 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the role that the entry and exit of heterogeneous firms plays in shaping aggregate fluctuations in economic activity. In so doing, it develops a dynamic stochastic general equilibrium model in which procyclical entry and countercyclical exit along a real business cycle lead to endogenous cyclical movements in average firm productivity. These movements stem from a composition effect due to the reallocation of market shares among firms with different levels of efficiency and affect the propagation of exogenous technological shocks. Numerical analysis suggests that existing models with representative firms may overstate the actual role of procyclical entry and exit in imperfectly competitive markets as a propagation mechanism of exogenous technology shocks. The reason is that procyclical entry and countercyclical exit disproportionately involve less efficiency firms whose impact on aggregate economic activity is hampered by their smaller size -- National Bureau of Economic Research web site.

Download or read book Three Essays on the Role of Heterogeneity in Industrial Organization International Trade and Environmental Economics written by Xin Zhao and published by . This book was released on 2017 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three studies on trade, industrial organization, and environmental economics. The first study investigates endogenous cartel formation with market entry and firm heterogeneity. We show why large firms do not join a cartel in some industries and choose to compete rather than cooperate with a cartel. We illustrate that, under certain conditions, only firms with intermediate productivity benefit from joining a cartel; and low-productive firms cannot compete efficiently for production quota in the cartel and hence choose to stay out. High-productive firms prefer to stay out because building excess capacity in cartel lowers their profits.

Download or read book Essays on Industry Investment and Financial Markets written by Bongseok Choi and published by . This book was released on 2011 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates asymmetries of financing patterns, depending on group characteristics - firm size or riskiness, which have shown in the empirical literature. The dissertation consists of two essays. This first essay, Financial innovation, Firm size and Growth, proposes a model of Schumpeterian growth endogeneizing the disproportionate impact of financial innovation on small firm sectors. Entrepreneurial skill on a continuum of types is private information. Hence, the severity of adverse selection problems between investors and entrepreneurs varies based on firm size. In the absence of financial innovation, the arrival of a new technology frontier renders existing screening technology obsolete, thereby making it more challenging for an investor to design a truth-telling mechanism, particularly with small firm (and size-dispersed) sectors. Thus, successful financial innovation is more pronounced in such sectors. The link between financial innovation and the small firm (and size-dispersed) sectors is weak in financially developing countries. I test my model prediction by using cross-country and cross-sector data at the European industry level. This result is consistent with my prediction. The second essay, Firm risks, Capital allocation frictions and the Business cycles, attempts to address new findings in business cycles: the cross-sectional standard deviation of firm level investment rate (investment dispersion) is at most acyclical or procyclical. This differs from the dispersion of productivity, output, and interest rates, which is countercyclical. I develop a dynamic stochastic general equilibrium model of physical capital matching frictions between heterogeneous firms and investors. In the mode, economic fluctuations are caused mainly by shocks to heterogeneity in firms' risks. One main feature is that investors search firms with priority given to loans to safe firms. Because safe firms are most likely to benefit from capital accumulation, this setting drives asymmetric patterns of firm-level business cycles - output, investment rate, and interest rates in a unified framework. In essence, the uncertainty in heterogeneous risks across firms generates the pro- or a-cyclical behavior of investment dispersions which is the data demonstrates.

Download or read book Firm Heterogeneity Innovation and Value Capture written by Jennifer Tae and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: