Using a German firm-level data set, this paper is the first to jointly study the cyclical properties of the cross-sections of firm-level real value added and Solow residual innovations, as well as capital and employment adjustment. We find two new business cycle facts: 1) The cross-sectional...

Is time-varying firm-level uncertainty a major cause or amplifier of the business cycle? This paper investigates this question in the context of a heterogeneous-firm RBC model with persistent firm-level productivity shocks and lumpy capital adjustment, where cyclical changes in uncertainty...

Eastern Germany's recovery from the unification shockʺ has been characterized by deep structural change with apparent repercussions for the West as well and an integration process involving both capital deepening (extensive and intensive investment) and labor thinning (net out-migration). I...