We investigate retailers' price-setting behavior using a unique dataset containing by-the-second records of prices offered by closely competing retailers on a major Japanese price-comparison website. First, we find that, when the average price of a product across retailers falls rapidly, the...

Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this paper provides a systematic quantification of the role of input-output linkages as a mechanism for the propagation and amplification of shocks. We document that the disruption caused by the earthquake...

We construct a tractable neoclassical growth model that generates Pareto's law of income distribution and Zipf's law of the firm size distribution from idiosyncratic, firm-level productivity shocks. Executives and entrepreneurs invest in risk-free assets as well as their own firms' risky stocks,...