establishments' productivities. Inflation distorts aggregate productivity through firm entry dynamics. The model is calibrated to the … productivity of roughly 1.3 percent. This decrease in productivity is not innocuous: it is responsible for about one half of the …

establishments' productivities. Inflation distorts aggregate productivity through firm entry dynamics. The model is calibrated to the … decrease in the steady-state average productivity of roughly 0.5 percent compared to the optimum's steady-state. This decrease … in productivity is not innocuous: it leads to a doubling of the welfare cost of inflation. -- Firm dynamics …