On the irreconcilability of Pareto and Gibrat laws

Giulio Bottazzi

Physica A: Statistical Mechanics and its Applications, 2009, vol. 388, issue 7, 1133-1136

Abstract: If business firms face a multiplicative growth process in which their growth rates are Laplace distributed and independent from their sizes, the size cannot be distributed according to a stationary Pareto distribution. Recent contributions, using formal arguments, seem to contrast with these statements. We prove that the proposed formal results are wrong.

Keywords: Firm growth; Gibrat’s law; Power law distribution; Laplace distribution (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: On the Irreconcilability of Pareto and Gibrat Laws (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:388:y:2009:i:7:p:1133-1136

DOI: 10.1016/j.physa.2008.12.031

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