Download or read book Entry Exit Firm Dynamics and Aggregate Fluctuations written by Gian Luca Clementi and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Do firm entry and exit play a major role in shaping aggregate dynamics? Our answer is yes. Entry and exit propagate the effects of aggregate shocks. In turn, this results in greater persistence and unconditional variation of aggregate time-series. These are features of the equilibrium allocation in Hopenhayn (1992)'s model of equilibrium industry dynamics, amended to allow for investment in physical capital and aggregate fluctuations. In the aftermath of a positive productivity shock, the number of entrants increases. The new firms are smaller and less productive than the incumbents, as in the data. As the common productivity component reverts to its unconditional mean, the new entrants that survive become more productive over time, keeping aggregate efficiency higher than in a scenario without entry or exit.

Download or read book Firm Dynamics and the Origins of Aggregate Fluctuations written by Andrea Stella and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 Idiosyncratic Shocks and Aggregate Fluctuations in an Emerging Market written by Mr. Francesco Grigoli and published by International Monetary Fund. This book was released on 2021-12-10 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides the first assessment of the contribution of idiosyncratic shocks to aggregate fluctuations in an emerging market using confidential data on the universe of Chilean firms. We find that idiosyncratic shocks account for more than 40 percent of the volatility of aggregate sales. Although quite large, this contribution is smaller than documented in previous studies based on advanced economies, despite a higher degree of market concentration in Chile.We show that this finding is explained by larger firms being less volatile and by weaker propagation effects across Chilean firms.

Download or read book Temporary Layoffs Firm Entry and Exit Dynamics and Aggregate Fluctuations written by Sanjay Chugh and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study how the countercyclicality of temporary layoffs affects aggregate unemployment fluctuations, firm entry and exit dynamics, and macroeconomic fluctuations by building a tractable framework with equilibrium unemployment and endogenous firm entry and exit where firms have a choice over temporary layoffs and recalls from temporary layoff. The model can quantitatively generate the rich cyclical dynamics of temporary layoffs and recalls from temporary layoff, job vacancies, aggregate unemployment, and firm entry and firm survival in U.S. data, including the strong countercyclicality of temporary layoffs. We show that this cyclicality, which hinges on the presence of costs associated with worker recruiting, plays a key role in limiting the contraction in job creation and employment as well as the rise in aggregate unemployment during recessions. Moreover, amid factual acyclical wage dynamics, the countercyclical buffer effect stemming from temporary layoffs extends beyond the labor market and contributes to shallower contractions in the number of firms and in GDP. Despite their stabilizing force during downturns, temporary layoffs have little influence on the pace of employment and output recoveries.

Download or read book The Growth of Firms written by Alex Coad and published by Edward Elgar Publishing. This book was released on 2009-01-01 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research into firm growth has been accumulating at a terrific pace, and Alex Coad s survey of this multifaceted field provides a detailed, comprehensive overview of the latest developments. Much progress has been made in empirical research into firm growth in recent decades due to factors such as the availability of detailed longitudinal datasets, more powerful computers and new econometric techniques. This book provides an up-to-date catalogue of empirical work, as well as a coherent theoretical structure within which these new results can be interpreted and understood. It brings together a large body of recent research on firm growth from a multidisciplinary perspective, providing an up-to-date synthesis of stylized facts and empirical regularities. Numerous empirical findings and theories of firm growth are also surveyed and compared in order to evaluate their validity. Drawing on a vast and diverse body of research, this book will prove invaluable to students, academics, policy makers and practitioners with a need to keep abreast of studies in industrial organization, firm growth and management.

Download or read book Essays in Heterogeneity Irreversibility and Aggregate Fluctuations written by Julieta Caunedo and published by . This book was released on 2014 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Essays on Heterogeneity, Irreversibility and Aggregate Fluctuations" explores the connections between micro structure and technologies available to the agents operating in the economy and the dynamic of aggregate output and productivity. The thesis aims at further understanding the linkages between investment decisions of heterogeneous firms, the industry structure, and the aggregate dynamic of the economy. The hypothesis explored in this dissertation is that the dynamic of the industry structure, the patterns of selection of firms and investment within an industry bear information as of the efficiency with which the economy operates. The thesis consist of three essays organized in chapters. Chapter I, "Efficiency with Equilibrium Marginal Product Dispersion and Firm Selection" investigates conditions under which reductions in marginal product of capital dispersion induce Pareto improving allocations. The main result is that it is possible for allocations that display higher marginal product dispersion to be closer to the efficient one than allocations with lower marginal product dispersion. Chapter II, "Industry Dynamics, Investment and Business Cycles" investigates the quantitative implications of irreversibilities in investment for aggregate productivity. The main result of the essay is that for a calibrated economy to the US manufacturing sector, efficiency losses associated to firm selection are quantitatively more important than those associated to lower equilibrium dispersion in marginal products, i.e. capital reallocation. Chapter III, "Aggregate Fluctuations and the Industry Structure of the US Economy" documents changes in the input matrix of the US economy, and analyzes its implications for the relevance of sector specific and neutral shocks in aggregate fluctuations. The main finding is that an economy where the input output entries are allowed to fluctuate as in the data generates larger amplification of shocks and a stronger role for neutral shocks than a comparable economy with a fixed input output structure.

Download or read book Exit and Entry Increasing Returns to Specialization and Business Cycles written by Michael B. Devereux and published by Kingston, Ont. : Institute for Economic Research, Queen's University. This book was released on 1992 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The granular origins of aggregate fluctuations written by Xavier Gabaix and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This paper proposes that idiosyncratic firm-level fluctuations can explain an important part of aggregate shocks, and provide a microfoundation for aggregate productivity shocks. Existing research has focused on using aggregate shocks to explain business cycles, arguing that individual firm shocks average out in aggregate. I show that this argument breaks down if the distribution of firm sizes is fat-tailed, as documented empirically. The idiosyncratic movements of the largest 100 firms in the US appear to explain about one third of variations in output and the Solow residual. This "granular" hypothesis suggests new directions for macroeconomic research, in particular that macroeconomic questions can be clarified by looking at the behavior of large firms. This paper's ideas and analytical results may also be useful to think about the fluctuations of other economic aggregates, such as exports or the trade balance

Download or read book Entry Costs and the Macroeconomy written by Germán Gutiérrez and published by International Monetary Fund. This book was released on 2019-11-01 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by showing that the model-implied entry shocks correlate with independently constructed measures of entry regulations and M&As. We conclude that entry costs have risen in the U.S. over the past 20 years and have depressed capital and consumption by about seven percent.

Download or read book Financial Fragility Patterns of Firms Entry and Exit and Aggregate Dynamics written by Domenico Delli Gatti and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, extending the framework originally put forward by Greenwaldand Stiglitz (1988, 1990, 1993), we have developed a theoretical framework in which the financial conditions affect the capital accumulation decisions of the firm. In contrast to Greenwald and Stiglitz we allow for an unconstrained turnover of firms. In particular we will allow for an endogenously determined flow of exiting firms (through bankruptcy) and a stochastic flow of entrant firms.This entry-exit process will affect the dynamics of the distribution of firms which are differentiated by the equity ratio,i.e. the ratio of net worth to the capital stock. Aggregate variables (the capital stock, the equity base and aggregate output) can be interpreted as the outcome of a dynamic process which involves persistent financial heterogeneity and firms' turnover. It turns out that changes in financial conditions play an important role in determining output fluctuations. The ratio of financially fragile (Ponzi and speculative) firms to hedge units increases during the ascending phase of the business cycle as predicted in Minsky's financial instability hypothesis. We may also note that the entry and exit rates are strongly correlated, a prediction which is broadly consistent with the empirical evidence for advanced market economies.

Download or read book Firm specific Shocks and Aggregate Fluctuations written by Leonid Karasik and published by . This book was released on 2016 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In order to understand what drives aggregate fluctuations, many macroeconomic models point to aggregate shocks and discount the contribution of firm-specific shocks. Recent research from other developed countries, however, has found that aggregate fluctuations are in part driven by idiosyncratic shocks to large firms. Using data on Canadian firms, this paper examines the contribution of large firms to industry-level fluctuations in gross output, investment and employment in the manufacturing sector. The data suggest that shocks to large firms can explain as much as 46% and 37% of the fluctuations in gross output and investment, respectively, but do not contribute to fluctuations in employment"--Abstract.

Download or read book Frontiers of Business Cycle Research written by Thomas F. Cooley and published by Princeton University Press. This book was released on 1995-02-26 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: This introduction to modern business cycle theory uses a neoclassical growth framework to study the economic fluctuations associated with the business cycle. Presenting advances in dynamic economic theory and computational methods, it applies concepts to t

Download or read book Journal of International Business and Economic Affairs written by Ghada Gomaa A. Mohamed and published by Dr. Ghada Mohamed. This book was released on 2023-05-05 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: Journal of International Business and Economic Affairs ISSN 1916-8748 (Online): Library & Archive Canada Founded by: Dr. Ghada Gomaa A. Mohamed Edited by: Dr. Ghada Mohamed Dr. Morrison Handley-Schachler Dr. Thomas Henschel Journal of International Business and Economic Affairs Volume 1 - Issue 1 - 2023 Authors: Shirin Okhovat Abdulmalik Sadiq https://epe.lac-bac.gc.ca/100/201/300/jrn_intl_business_econ_aff/2023/v1n01.pdf

Download or read book The 9th Annual Conference of the Economic Forum of Entrepreneurship International Business written by Ghada Gomaa A. Mohamed and published by Dr. Ghada Mohamed. This book was released on 2023-02-01 with total page 121 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 9th Annual Conference of the Economic Forum of Entrepreneurship & International Business Organized by Dr. Ghada Gomaa A. Mohamed Conference venue: LMH, University of Oxford, Oxford, United Kingdom Conference proceeding: Library & Archive Canada Date: February 1st, 2023 Conference edited by: Dr. Ghada Mohamed Dr. Morrison Handley-Schchler Dr. Daniel May Dr. Thomas Henschel https://epe.lac-bac.gc.ca/100/201/300/annual_conference_economic/v09.pdf

Download or read book Computational Methods for the Study of Dynamic Economies written by Ramon Marimon and published by OUP Oxford. This book was released on 1999-03-04 with total page 298 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomics increasingly uses stochastic dynamic general equilibrium models to understand theoretical and policy issues. Unless very strong assumptions are made, understanding the properties of particular models requires solving the model using a computer. This volume brings together leading contributors in the field who explain in detail how to implement the computational techniques needed to solve dynamic economics models. A broad spread of techniques are covered, and their application in a wide range of subjects discussed. The book provides the basics of a toolkit which researchers and graduate students can use to solve and analyse their own theoretical models.

Download or read book Young Firms and Monetary Policy Transmission written by International Monetary Fund and published by International Monetary Fund. This book was released on 2021-03-05 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the role of business dynamism in the transmission of monetary policy by exploitingthe variation in firm demographics across U.S. states. Using local projections, we find that a larger fraction of young firms significantly mutes the effects of monetary policy on the labor market and personal income over the medium term. The firm entry rate and the employment share of young firms are key factors underpinning these results, which are robust to a battery of robustness tests. We develop a heterogeneous-firm model with age-dependent financial frictions that rationalizes the empirical evidence.