Missing growth from creative destruction

Aghion, Philippe; Bergeaud, Antonin; Boppart, Timo; Klenow, Pete; Li, Huiyu

Missing growth from creative destruction

Philippe Aghion, Antonin Bergeaud, Timo Boppart, Pete Klenow and Huiyu Li

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of "missing growth" for private nonfarm businesses from 1983-2013. The first approach exploits information on the market share of surviving plants. The second approach applies indirect inference to firm-level data. We find: (i) missing growth from imputation is substantial — at least 0.6 percentage points per year; and (ii) most of the missing growth is due to creative destruction (as opposed to new varieties).

Keywords: growth (search for similar items in EconPapers)
Date: 2017-11-20
New Economics Papers: this item is included in nep-ino
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Citations: View citations in EconPapers (29)

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