The German Manufacturing Sector is a Granular Economy
Joachim Wagner ()
No 6115, IZA Discussion Papers from Institute of Labor Economics (IZA)
Using the approach suggested by Gabaix (Econometrica 2011) this paper demonstrates that idiosyncratic shocks in the largest firms are important for an understanding of aggregate volatility in German manufacturing industries. The implications of this finding for theoretical and empirical research and for economic policy are discussed.
Keywords: granular residual; idiosyncratic shocks; power law; Germany (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
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Published in: Applied Economics Letters, 2012, 19 (17), 1663-1665
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Journal Article: The German manufacturing sector is a granular economy (2012)
Working Paper: The German Manufacturing Sector is a Granular Economy (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6115
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