Asymmetric Firm Dynamics under Rational Inattention

Antonella Tutino and Anton Cheremukhin
Additional contact information
Antonella Tutino: Federal Reserve Bank of Dallas

No 161, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: We document new evidence on the link between business failures, markups and business cycle asymmetry in the U.S. economy. We study a model where costly information-processing constraints affect exit decisions of heterogeneous firms in the presence of an aggregate demand externality. We show that such a model is capable of explaining both the novel and the classical empirical evidence on output growth asymmetry, the asymmetry between entry and exit rates, as well as counter-cyclical variations in profit margins.

Date: 2012
New Economics Papers: this item is included in nep-bec and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2012/paper_161.pdf (application/pdf)

Related works:
Working Paper: Asymmetric firm dynamics under rational inattention (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed012:161

Access Statistics for this paper

More papers in 2012 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().