Large Firm Dynamics and the Business Cycle

• 成果类型: Article
• 署名作者: Carvalho, Vasco M.; Grassi, Basile
• 署名单位: University of Cambridge; Centre for Economic Policy Research - UK; Alan Turing Institute; Bocconi University; Bocconi University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20151317
• 发表日期: 2019
• 页码: 1375-1425
• 关键词: perfect industry dynamics; aggregate; GROWTH; size; INVESTMENT; entry; plant; PRODUCTIVITY; origins; MODEL

摘要

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 an analytical characterization of the law of motion of the aggregate state in this class of models, the firm size distribution, and show that 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. (JEL, D21 D22, D24, E32, L11)