DISPERSION OVER THE BUSINESS CYCLE:PASSTHROUGH,PRODUCTIVITY, AND DEMAND

Mikael Carlsson, Alex Clymo and Knut-Eric Joslin ()
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Knut-Eric Joslin: Kristiania University College

No 414, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: We characterize the dispersion of firm-level productivity and demand shocks using Swedish microdata including prices and utilization and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than TFPQ dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneousfirm model matching the micro facts, demand dispersion has unambiguously negative effects on output via a “wait and see” channel. Productivity dispersion does not generate “wait and see” effects, but affects output negatively by inducing markup dispersion.

Keywords: demand estimation; productivity; variable markups; business cycles; dispersion; uncertainty; passthrough; adjustment costs (search for similar items in EconPapers)
JEL-codes: D21 D22 D81 E32 L11 (search for similar items in EconPapers)
Pages: 122 pages
Date: 2022-05-01
New Economics Papers: this item is included in nep-bec, nep-eff and nep-mac
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Related works:
Working Paper: Dispersion over the business cycle: passthrough, productivity and demand? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0414

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