Entry and Exit Echoes

Boyan Jovanovic () and Chung-Yi Tse

Review of Economic Dynamics, 2010, vol. 13, issue 3, 514-536

Abstract: While aggregate data do not show the investment echoes predicted by vintage-capital models, echoes arise in rates of entry and exit of firms at the industry level. Moreover, industries where prices decline rapidly experience early 'shakeouts'. The relation emerges naturally in a vintage-capital model in which exit of firms sometimes accompanies the replacement of their capital, and in which a shakeout is the first replacement 'echo' of the capital created when the industry is born. (Copyright: Elsevier)

Keywords: Vintage; capital (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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DOI: 10.1016/j.red.2009.07.004

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