Product Dynamics and Macroeconomic Shocks

Masashige Hamano () and Toshihiro Okubo ()
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Masashige Hamano: Waseda University, School of Political Science and Economics
Toshihiro Okubo: Faculty of Economics, Keio University

No 2602, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: This paper investigates the relationships between aggregate shocks and individual products in the economy, aiming to inform macroeconomic policy and address sectoral imbalances. Using Japanese man- ufacturing census data from 1992 to 2013, we analyze product sales growth (intensive margins) and the number of product-producing plants (extensive margins) to identify patterns and heterogeneity across products and product categories. We employ a structural model to analyze the sources of product busi- ness cycles, finding that product-specific demand shocks play a crucial role in explaining product sales dynamics, while both product-specific and plant-product specific shocks are essential for understanding extensive margins. Our findings offer important implications for the design of targeted and effective poli- cies that promote stability, growth, employment, and inclusiveness across diverse sectors of the economy.

Keywords: Product Dynamics; Firm Heterogeneity; DSGE (search for similar items in EconPapers)
JEL-codes: D24 E23 E32 L11 L60 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2026-04
New Economics Papers: this item is included in nep-dge and nep-inv
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