EconPapers    
Economics at your fingertips  
 

The Macroeconomic Implications of Firm Selection

Dudley Cooke () and Tatiana Damjanovic ()
Additional contact information
Dudley Cooke: University of Exeter

No 2018_01, Working Papers from Durham University Business School

Abstract: This paper studies the macroeconomic implications of firm selection in a model with monopolistic competition and translog preferences. Firm selection magnifies the impact of aggregate technology shocks. Magnification is limited by diminishing returns to new varieties and misallocation. We provide analytical results linking selection, diminishing returns, and misallocation with measured total factor productivity (TFP) and the distribution of firm-level productivity. A calibrated version of our model suggests the contribution of firm selection to variations in TFP is over 20 percent.

Keywords: Firm Selection; Translog Preferences; Productivity Distribution (search for similar items in EconPapers)
JEL-codes: E32 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2018-01
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.dur.ac.uk/resources/business/working-papers/EconWP18_01.pdf main text (application/pdf)

Related works:
Working Paper: The Macroeconomic Implications of Firm Selection (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dur:durham:2018_01

Access Statistics for this paper

More papers in Working Papers from Durham University Business School Durham University Business School, Mill Hill Lane, Durham DH1 3LB, England. Contact information at EDIRC.
Bibliographic data for series maintained by IT Office ().

 
Page updated 2019-10-15
Handle: RePEc:dur:durham:2018_01