Dispersion over the business cycle: passthrough, productivity and demand?

Mikael Carlsson, Alex Clymo and Knut-Eric Joslin ()
Additional contact information
Knut-Eric Joslin: Kristiania University College, Postal: Kirkegata 24-26, 0153 Oslo, https://www.kristiania.no/en/

No 2023:1, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than productivity dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneous-firm model matching the micro facts, demand dispersion has unambiguously negative effects on output via increased uncertainty and a “wait and see” channel. Productivity dispersion does not generate “wait and see” effects, but affects output negatively by inducing markup dispersion.

Keywords: demand estimation; productivity; variable markups; business cycles; dispersion; uncertainty; passthrough; adjustment costs (search for similar items in EconPapers)
JEL-codes: D21 D22 D81 E32 L11 (search for similar items in EconPapers)
Pages: 115 pages
Date: 2023-01-19
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifau.se/globalassets/pdf/se/2023/wp-20 ... ivity-and-demand.pdf Full text (application/pdf)

Related works:
Working Paper: DISPERSION OVER THE BUSINESS CYCLE:PASSTHROUGH,PRODUCTIVITY, AND DEMAND (2022)
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:hhs:ifauwp:2023_001

Access Statistics for this paper

More papers in Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy IFAU, P O Box 513, SE-751 20 Uppsala, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Ali Ghooloo ( this e-mail address is bad, please contact ).