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, yet, a shock to IST influence a change in aggregate consumption. Inferences from impulse response function (IRF) showed … that a positive shock to IST induces a positive response or a positive co-movement among all three macro variables …
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In this work we study the granular origins of business cycles and their possible underlying drivers. As shown by Gabaix (2011), the skewed nature of firm size distributions implies that idiosyncratic (and independent) firm-level shocks may account for a significant portion of aggregate...
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