Exact Draws from the Stationary Distribution of Entry-Exit Models

Takashi Kamihigashi and John Stachurski ()

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: In equilibrium models of firm dynamics, the stationary equilibrium distribution of firms summarizes the predictions of the model for a given set of primitives. Focusing on Hopenhayn's seminal model of firm dynamics with entry and exit (Econometrica, 60:5, 1992, p.~1127--1150), we provide an algorithm that generates exact draws from the stationary distribution in finite time for any specified exit threshold. The technique is able to rapidly generate large numbers of exact and independent draws.

JEL-codes: C61 C63 (search for similar items in EconPapers)
Pages: 16 Pages
Date: 2012-10
New Economics Papers: this item is included in nep-bec
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Working Paper: Exact Draws from the Stationary Distribution of Entry-Exit Models (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2012-588

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