BUSINESS CYCLE FLUCTUATIONS AND FIRMS’ SIZE DISTRIBUTION DYNAMICS

Domenico Delli Gatti, Corrado Di Guilmi, Edoardo Gaffeo, Gianfranco Giulioni, Mauro Gallegati and Antonio Palestrini ()
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Gianfranco Giulioni: Department of Economics, Università Politecnica delle Marche, Piaz.le, Martelli 8, I-60121 Ancona, Italy

Chapter 10 in Industry and Labor Dynamics:The Agent-Based Computational Economics Approach, 2004, pp 199-221 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractPower law behavior is an emerging property of many economic models. In this paper we emphasize the fact that power law distributions are persistent but not time invariant. In fact, the scale and the shape of the firms’ size distribution fluctuate over time. In particular on a log-log space both the intercept and the slope of the power law distribution of firms’ size change over the cycle: during expansions (recessions) the straight line representing the distribution shifts up and becomes less steep (steeper). We show that the empirical distributions generated by simulations of the model presented by [11] mimic real empirical distributions remarkably well.

Keywords: Simulation; Agent-Based; Computational Economics; Labor; Industrial Dynamics; Innovation; Cluster; Firm Behavior (search for similar items in EconPapers)
Date: 2004
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