Large firm dynamics and the business cycle
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- dc.contributor.author Carvalho, Vasco M.ca
- dc.contributor.author Grassi, Basileca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2017-07-26T10:50:48Z
- dc.date.available 2017-07-26T10:50:48Z
- dc.date.issued 2015-04-01
- dc.date.modified 2017-07-23T02:16:58Z
- dc.description.abstract Do large firm dynamics drive the business cycle? We answer this question by developing a quantitative theory of aggregate fluctuations caused by firm-level disturbances alone. We show that a standard heterogeneous firm dynamics setup already contains in it a theory of the business cycle, without appealing to aggregate shocks. We offer a complete analytical characterization of the law of motion of the aggregate state in this class of models the firm size distribution and show that the resulting closed form solutions for aggregate output and productivity dynamics display: (i) persistence, (ii) volatility and (iii) time-varying second moments. We explore the key role of moments of the firm size distribution and, in particular, the role of large firm dynamics in shaping aggregate fluctuations, theoretically, quantitatively and in the data.
- dc.format.mimetype application/pdfca
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1481
- dc.identifier.uri http://hdl.handle.net/10230/23589
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1481
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword large firm dynamics; firm size distribution; random growth; aggregate fluctuations.
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Large firm dynamics and the business cycleca
- dc.type info:eu-repo/semantics/workingPaper