TY  - BOOK
AU  - Clementi,Gian Luca
AU  - Palazzo,Berardino
ED  - National Bureau of Economic Research.
TI  - Entry, Exit, Firm Dynamics, and Aggregate Fluctuations
T2  - NBER working paper series
PY  - 2013///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - July 2013; Hardcopy version available to institutional subscribers
N2  - Do firm entry and exit play a major role in shaping aggregate dynamics? Our answer is yes. Entry and exit propagate the effects of aggregate shocks. In turn, this results in greater persistence and unconditional variation of aggregate time-series. These are features of the equilibrium allocation in Hopenhayn (1992)'s model of equilibrium industry dynamics, amended to allow for investment in physical capital and aggregate fluctuations.  In the aftermath of a positive productivity shock, the number of entrants increases. The new firms are smaller and less productive than the incumbents, as in the data. As the common productivity component reverts to its unconditional mean, the new entrants that survive become more productive over time, keeping aggregate efficiency higher than in a scenario without entry or exit
UR  - https://www.nber.org/papers/w19217
UR  - http://dx.doi.org/10.3386/w19217
ER  -