Endogenous Firm Entry in an Estimated Model of the U.S. Business Cycle

Sven Offick and Roland Winkler ()

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: This paper explores and quantifies the role of endogenous firm entry in amplifying and propagating shocks to the economy. To this end, we estimate two DSGE models on US data with Bayesian methods: one model with endogenous firm entry and translog preferences and one model without. Both models perform equally well in fitting the data but in doing so the endogenous entry model does not rely on a fairly flexible supply of labor. The presence of firm entry amplifies the effects of productivity and wage mark-up shocks, but it dampens those of aggregate demand and investment-specific technology shocks.

JEL-codes: C11 E20 E32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ENDOGENOUS FIRM ENTRY IN AN ESTIMATED MODEL OF THE U.S. BUSINESS CYCLE (2019)
Working Paper: Endogenous firm entry in an estimated model of the U.S. business cycle (2015)
Working Paper: Endogenous firm entry in an estimated model of the U.S. business cycle (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:79845

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