Value without Employment
Simcha Barkai and
Stavros Panageas
No 29414, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
Young firms' contribution to aggregate employment has been underwhelming. However, a similar trend is not apparent in their contribution to aggregate sales or aggregate stock market capitalization. We study the implications of the arrival of “low marginal - high average” revenue-product-of-labor firms in a stylized model of dynamic firm heterogeneity, and show that the model can account for a large number of facts related to the decline in “business dynamism”. We study the long-term implications of the decline in business dynamism on the economy by providing analytical results that connect the decline in dynamism to the eventual decline of consumption.
JEL-codes: D24 E23 E24 E25 G24 (search for similar items in EconPapers)
Date: 2021-10
New Economics Papers: this item is included in nep-bec, nep-lma and nep-mac
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