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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...
Persistent link: https://www.econbiz.de/10012461225
probability of disaster leads to a collapse of investment and a recession, an increase in risk spreads, and a decrease in the … of business cycle dynamics, especially sharp downturns in investment and output such as 2008-IV …
Persistent link: https://www.econbiz.de/10012463250
Feedback from stock prices to cash flows occurs because information revealed by firms' stock prices influences the actions of competitors. We explore the implications of feedback within a noisy rational expectations setting with incumbent publicly traded firms and privately held new entrants. In...
Persistent link: https://www.econbiz.de/10012459278
We provide a nonlinear characterization of the macroeconomic impact of microeconomic productivity shocks in terms of reduced-form non-parametric elasticities for efficient economies. We also show how structural parameters are mapped to these reduced-form elasticities. In this sense, we extend...
Persistent link: https://www.econbiz.de/10012455536
revisions in Fernald's series. When applied to U.S. data, the shock predicts sustained future productivity growth while … variables. The shock does, however, not lead to comovement in macroeconomic aggregates as typically associated with business …
Persistent link: https://www.econbiz.de/10012455539
This paper explores the impact of incomplete markets and strong complementarities on the time series properties of aggregate activity. We consider an economy which consists of a large number of industries whose production functions both are nonconvex and exhibit localized technological...
Persistent link: https://www.econbiz.de/10012475386
Economies respond differently to aggregate shocks that reduce output. While some countries rapidly recover their pre-crisis trend, others stagnate. Recent studies provide empirical support for a link between aggregate growth and plant dynamics through its effect on productivity: the entry and...
Persistent link: https://www.econbiz.de/10012468109
An analysis of the performance of GDP, employment and other labor market variables following the troughs in postwar U.S. business cycles points to much slower recoveries in the three most recent episodes, but does not reveal any significant change over time in the relation between GDP and...
Persistent link: https://www.econbiz.de/10012460574
product market, concerning in particular entry barriers, are negatively related to investment. The implications of our … analysis are clear: regulatory reforms, especially those that liberalize entry, are very likely to spur investment …
Persistent link: https://www.econbiz.de/10012469140
One of the most important developments in the growth literature of the last decade is the enhanced appreciation of the role that the misallocation of resources plays in helping us understand income differences across countries. Misallocation at the micro level typically reduces total factor...
Persistent link: https://www.econbiz.de/10012461916