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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
Note: AP EFG LS PR
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Citations: View citations in EconPapers (2)

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