Countercyclical Profitability Spread: A New Class of Stylized Business Cycle Fact?

Frank Schohl

Working Paper Series B from Friedrich Schiller University of Jena, School of of Economics and Business Administration

Abstract: The conventional lists of stylized facts are composed of sentences about the comovement of ordinary macroeconomic time-series and the business cycle. It is argued that these lists are incomplete because heterogeneous agent stylized facts are missing. But there is evidence about the heterogeneity of firm-level profitability changes over the cycle both from scattered literature as well as from an empirical examination. It is concluded that the countercyclical profitability spread should make up the first item on a new list of microfoundation stylized facts which is an indispensable necessity for setting up empirically valuable heterogeneous agent models of the business cycle.

Keywords: firm heterogeneity; heterogeneous agent models; microfoundation. (search for similar items in EconPapers)
JEL-codes: E32 L16 (search for similar items in EconPapers)
Date: 1998-03-01
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Persistent link: https://EconPapers.repec.org/RePEc:jen:jenavo:1998-04

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