The 1990s have witnessed a revival in economists' interest and hope of explaining aggregate and microeconomic investment behavior. New theories, better econometric procedures, and more detailed panel data sets are behind this movement. Much of the progress has occurred at the level of...

Market economies experience high rates of job creation and job destruction in almost every time period and sector. Each year, many businesses expand and many others contract. New businesses constantly enter, while others abruptly exit or gradually disappear. Amidst the turbulence of business...

We propose a stochastic control model to study corporate investment with generalized investment frictions, including investment lags and various of adjustment costs. We find that the dominance of the ``good news principle'' or ``bad news principle'' is determined by the joint effect of...

We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than productivity dispersion in recessions....

This paper presents a flow-based methodology for real-time unemployment rate projections and shows that this approach performed considerably better at the onset of the COVID-19 recession in spring 2020 in predicting the peak unemployment rate as well as its rapid decline over the year. It...

The COVID-19 crisis has demonstrated that Americans rely on certain for-profit corporations to supply the essentials of everyday life. Even though the government had assumed extraordinary responsibilities for the wellbeing of its citizens for the duration of the crisis, for-profit companies were...

There is growing evidence of producer-level idiosyncratic shocks affecting macroeconomic aggregates as they are propagated and amplified by input-output linkages, which are also known as the production network. Most of the recent models assume that this shock-propagation is instantaneous,...

Empirical studies showed that firm-level volatility has been increasing but the aggregate volatility has been decreasing in the US for the post-war period. This paper proposes a unified explanation for these diverging trends. Our explanation is based on a story of financial development -...

The theory of transformation pressure sheds light on the importance of negative driving forces for economic growth and the countercyclical movement in innovations and productivity growth. The theory suggests that firms have a status-quo bias in periods of increasing profits leading to lower...