We analyse the incidence of endogenous entry and firm TFP-heterogeneity on the response of aggregate inflation to exogenous shocks. We build up an otherwise standard DSGE model in which the number of firms is endogenously determined and firms differ in their steady state level of productivity....

There is a stark contrast between the recent evolution of labor productivity (and TFP) in the US and EU countries. In the US it accelerated around the mid-1990s and there is evidence of reversion to a high-growth regime. In some EU countries, while employment-population ratios started to rise...

Oil prices have fluctuated considerably in the last few years, with major effects on the economy. This paper describes some of the mechanisms by which these fluctuations produce changes in the long-run growth of the economy. In particular, it analyses the effect on productivity, capital stock...

In this paper we measure, at sectoral level, the sources of Spanish productivity growth, distinguishing among the roles played by labor productivity, the degree of factor substitution and total factor productivity (Solow residual). In terms of value added, total factor productivity growth in the...

Inflation has fallen dramatically in countries like Spain and Italy over the last decade, but the rate of increase in "home good" prices remains stubbornly higher than the rate of increase in "traded good" prices. The paper begins by showing that this discrepancy can be explained (at least in...

Total Factor Productivity (TFP) accounts for a sizeable proportion of the income and growth differences across countries. Two challenges remain to researchers aiming to explain these differences: on the one hand, TFP growth is hard to measure; on the other hand, model uncertainty hampers...

This paper explores the dynamics of price-cost mark-ups using firm-level data, paying particular attention to the crisis period 2008-2011. To this end, we apply the econometric framework developed by Klette (1999) to a comprehensive sample of Spanish non-financial corporations in order to...

This paper examines the links between productivity and social welfare, with an application to the banking industry. It models spatial price competition between bank branches jointly with banks’ decisions on the opening or closing of branches based on profit expectations. The model predicts...

Many studies have established that a small number of firms, known as fast-growth firms or Gazelles, create most of the new jobs. In spite of the importance of this topic from a policy-point of view, most of those studies are descriptive and limited to a comparison of the characteristics of the...

Despite the relevance in terms of policy, we still know little in Spain about where and by whom jobs are created, and how that is affecting the size distribution of firms. The main innovation of this paper is to use a rich database that overcomes the problems encountered by other firm-level...