Are fluctuations in firms' profitability risk a major cause of regular business cycles? We study this question within the framework of a heterogeneous-firm dynamic stochastic general equilibrium model with fixed capital adjustment costs. In such a model, surprise increases of risk lead to a...

We document a new business cycle fact: the cross-sectional standard deviation of firm-level investment (investment dispersion) is robustly and significantly procyclical. This makes investment dispersion different from the dispersion of productivity and output growth, which is countercyclical....

This paper examines how households adjusted their consumption behavior in response to COVID-19 infection risk during the early phase of the pandemic. We use a monthly consumption survey specifically designed by the German Statistical Office covering the second wave of COVID-19 infections from...

When employers face a trade-off between growing large and paying low wages that is, when they have monopsony power some productive employers will decide to acquire fewer customers, forgo sales, and remain small. These decisions have adverse consequences for aggregate labor productivity. Using...

Wir dokumentieren, basierend auf administrativen Daten, dass in ostdeutschen Betrieben - im Vergleich zu westdeutschen - die Löhne mit der Größe der Betriebe stärker steigen, dass ostdeutsche Betriebe weniger in Marketing investieren, kleiner bleiben und im Durchschnitt niedrigere Löhne...

This article discusses the economic effects of a potential cut-off of the German economy from Russian energy imports. We show that the effects are likely to be substantial but manageable. In the short run, a stop of Russian energy imports would lead to a GDP decline in range between 0.5% and 3%...