Firms, destinations, and aggregate fluctuations
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- dc.contributor.author di Giovanni, Julianca
- dc.contributor.author Levchenko, Andrei A.ca
- dc.contributor.author Méjean, Isabelleca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2017-07-26T10:51:27Z
- dc.date.available 2017-07-26T10:51:27Z
- dc.date.issued 2013-10-01
- dc.date.modified 2017-07-23T02:15:34Z
- dc.description.abstract This paper uses a database covering the universe of French firms for the period 1990- 2007 to provide a forensic account of the role of individual firms in generating aggregate fluctuations. We set up a simple multi-sector model of heterogeneous firms selling to multiple markets to motivate a theoretically-founded decomposition of firms' annual sales growth rate into different components. We find that the firm-specific component contributes substantially to aggregate sales volatility, mattering about as much as the components capturing shocks that are common across firms within a sector or country. We then decompose the firm-specific component to provide evidence on two mechanisms that generate aggregate fluctuations from microeconomic shocks highlighted in the recent literature: (i) when the firm size distribution is fat-tailed, idiosyncratic shocks to large firms directly contribute to aggregate fluctuations; and (ii) aggregate fluctuations can arise from idiosyncratic shocks due to input-output linkages across the economy. Firm linkages are approximately three times as important as the direct effect of firm shocks in driving aggregate fluctuations.
- dc.format.mimetype application/pdfca
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1387
- dc.identifier.citation Econometrica, 82:4 , 1303-1340, July 2014
- dc.identifier.uri http://hdl.handle.net/10230/21148
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1387
- 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 aggregate fluctuations
- dc.subject.keyword firm-level shocks
- dc.subject.keyword large firms
- dc.subject.keyword linkages.
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Firms, destinations, and aggregate fluctuationsca
- dc.type info:eu-repo/semantics/workingPaper