Exact Draws from the Stationary Distribution of Entry-Exit Models

Takashi Kamihigashi and John Stachurski ()

No DP2012-26, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: In equilibrium models of firm dynamics, the stationary equilibrium distribution of firms summarizes the predictions of the model for a given set of primitives. Focusing on Hopenhayn's seminal model of firm dynamics with entry and exit (Econometrica, 60:5, 1992, p. 1127–1150), we provide an algorithm that generates exact draws from the stationary distribution in finite time for any specified exit threshold. The technique is able to rapidly generate large numbers of exact and independent draws.

Keywords: Simulation; Stationary equilibrium; Firm dynamics (search for similar items in EconPapers)
JEL-codes: C61 C63 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2012-10
New Economics Papers: this item is included in nep-bec and nep-cmp
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Related works:
Working Paper: Exact Draws from the Stationary Distribution of Entry-Exit Models (2012)
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