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dc.titleThe Firm Dynamics of Business Cycles
dc.contributor.authorAyres, João
dc.contributor.authorRaveendranathan, Gajendran
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageUnited States
dc.date.available2019-07-22T00:00:00
dc.date.issue2019-07-22T00:00:00
dc.description.abstractWe use firm dynamics statistics on employment by age, entry, exit, and job flows to identify sources of business cycle fluctuations in the U.S. economy since 1980. We extend the Hopenhayn (1992) firm dynamics model by incorporating capital and debt accumulation to the firm's problem and savings to the consumer's problem. Analyzing the implications of unexpected productivity, credit, labor wedge, and investment wedge shocks for firm dynamics statistics, we show that (a) productivity shock accounts for the 1990-91 and 2001 recessions, and (b) productivity and credit shocks jointly account for the 1980-82 and 2007-09 recessions.
dc.format.extent38
dc.identifier.doihttp://dx.doi.org/10.18235/0001792
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The_Firm_Dynamics_of_Business_Cycles_en.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectProductivity Shock
dc.subjectProduction and Business Cycle
dc.subjectMacroeconomy
dc.subject.jelcodeE24 - Employment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor Productivity
dc.subject.jelcodeE32 - Business Fluctuations • Cycles
dc.subject.jelcodeD22 - Firm Behavior: Empirical Analysis
dc.subject.jelcodeD21 - Firm Behavior: Theory
dc.subject.keywordsfirm dynamics; business cycles
idb.identifier.pubnumberIDB-DP-00696
idb.operationRG-K1098
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