Firm creation is central to many theories of economic growth. I show using U.S. Census microdata that new firms play a dominant role in the growth of local areas, such as cities and counties. Entry is very persistent at the local level, and variation in this extensive margin accounts for most of...

Population growth has declined markedly in almost all major economies since the 1970s. We argue this trend has important consequences for the process of firm dynamics and aggregate growth. We study a rich semi-endogenous growth model of firm dynamics, and show analytically that a decline in...

We present evidence that weak household demand contributed to a reduction in firm and establishment entry in the Great Recession. Motivated by this evidence, we characterize aggregate growth dynamics in response to demand shocks in a broad class of endogenous growth models. We show that the...