In this paper I evaluate the contribution of R&D investments to productivity growth. The basis for the analysis are the free entry condition and the fact that most R&D innovations are embodied. Free entry yields a relationship between the resources devoted to R&D and the growth rate of...

In this paper we document the diverging trends in volatility of the growth rate of sales at the aggregate and firm level. The upward trend in micro volatility is not driven by a compositional bias in the sample studied. We also show that many other firm level variables display a similar upward...

This paper presents a new approach to assess the role of price mismeasurement in the productivity slowdown. I invert the firm's investment decision to identify the embodied and disembodied components of productivity growth. With a Cobb-Douglas production function, output price mismeasurement...