scholarly journals Diffusion Lags and Aggregate Fluctuations. New Name: Product Innovation and the Business Cycle.

10.3386/w4455 ◽  
1993 ◽  
Author(s):  
Boyan Jovanovic ◽  
Saul Lach
Keyword(s):  
Business Cycle ◽  
Product Innovation ◽  
Aggregate Fluctuations ◽  
New Name ◽  
The Business Cycle

scholarly journals Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?

1999 ◽  
Vol 89 (1) ◽  
pp. 249-271 ◽  
Author(s):  
Jordi Galí
Keyword(s):  
Simple Model ◽  
Business Cycles ◽  
Business Cycle ◽  
Monopolistic Competition ◽  
Real Business Cycle ◽  
Technology Shocks ◽  
Aggregate Fluctuations ◽  
G7 Countries ◽  
Technology Shock ◽  
The Business Cycle

I estimate a decomposition of productivity and hours into technology and non-technology components. Two results stand out: (a) the estimated conditional correlations of hours and productivity are negative for technology shocks, positive for nontechnology shocks; (b) hours show a persistent decline in response to a positive technology shock. Most of the results hold for a variety of model specifications, and for the majority of G7 countries. The picture that emerges is hard to reconcile with a conventional real-business-cycle interpretation of business cycles, but is shown to be consistent with a simple model with monopolistic competition and sticky prices. (JEL E32, E24)

scholarly journals Inventories and the Business Cycle: An Equilibrium Analysis of (S, s) Policies

2007 ◽  
Vol 97 (4) ◽  
pp. 1165-1188 ◽  
Author(s):  
Aubhik Khan ◽  
Julia K Thomas
Keyword(s):  
Business Cycle ◽  
Equilibrium Analysis ◽  
Aggregate Fluctuations ◽  
Cycle Model ◽  
Delivery Costs ◽  
Inventory Investment ◽  
Cyclical Variability ◽  
Business Cycle Model ◽  
The Business Cycle ◽  
Inventory Accumulation

We develop an equilibrium business cycle model where nonconvex delivery costs lead firms to follow (S, s) inventory policies. Calibrated to postwar US data, the model reproduces two-thirds of the cyclical variability of inventory investment. Moreover, it delivers strongly procyclical inventory investment, greater volatility in production than sales, and a countercyclical inventory-to-sales ratio. Our model challenges several prominent claims involving inventories, including the widely held belief that they amplify aggregate fluctuations. Despite the comovement between inventory investment and final sales, GDP volatility is essentially unaltered by inventory accumulation, because procyclical inventory investment diverts resources from final production, thereby dampening fluctuations in sales. (JEL E22, E32).

scholarly journals Large Firm Dynamics and the Business Cycle

2019 ◽  
Vol 109 (4) ◽  
pp. 1375-1425 ◽  
Author(s):  
Vasco M. Carvalho ◽  
Basile Grassi
Keyword(s):  
Business Cycle ◽  
Size Distribution ◽  
Firm Size ◽  
Large Firm ◽  
Firm Dynamics ◽  
Aggregate Fluctuations ◽  
Firm Level ◽  
Firm Size Distribution ◽  
The Business Cycle

Do large firm dynamics drive the business cycle? We answer this question by developing a quantitative theory of aggregate fluctuations caused by firm-level disturbances alone. We show that a standard heterogeneous firm dynamics setup already contains in it a theory of the business cycle, without appealing to aggregate shocks. We offer an analytical characterization of the law of motion of the aggregate state in this class of models, the firm size distribution, and show that aggregate output and productivity dynamics display: (i ) persistence, (ii ) volatility, and (iii ) time-varying second moments. We explore the key role of moments of the firm size distribution, and, in particular, the role of large firm dynamics, in shaping aggregate fluctuations, theoretically, quantitatively, and in the data. (JEL D21, D22, D24, E32, L11)

scholarly journals Endogenous Liquidity and the Business Cycle

2015 ◽  
Vol 105 (6) ◽  
pp. 1883-1927 ◽  
Author(s):  
Saki Bigio
Keyword(s):  
Asymmetric Information ◽  
Business Cycle ◽  
Great Recession ◽  
Financial Constraints ◽  
Aggregate Fluctuations ◽  
The Great Recession ◽  
The Business Cycle ◽  
The Cost

I study an economy where asymmetric information about the quality of capital endogenously determines liquidity. Liquid funds are key to relaxing financial constraints on investment and employment. These funds are obtained by selling capital or using it as collateral. Liquidity is determined by balancing the costs of obtaining liquidity under asymmetric information against the benefits of relaxing financial constraints. Aggregate fluctuations follow increases in the dispersion of capital quality, which raise the cost of obtaining liquidity. An estimated version of the model can generate patterns for quantities and credit conditions similar to the Great Recession. (JEL D82, E22, E24, E32, E44, G01)

Product Innovation and the Business Cycle

1997 ◽  
Vol 38 (1) ◽  
pp. 3 ◽  
Author(s):  
Boyan Jovanovic ◽  
Saul Lach
Keyword(s):  
Business Cycle ◽  
Product Innovation ◽  
The Business Cycle

scholarly journals Small and Large Firms over the Business Cycle

2020 ◽  
Vol 110 (11) ◽  
pp. 3549-3601
Author(s):  
Nicolas Crouzet ◽  
Neil R. Mehrotra
Keyword(s):  
Business Cycle ◽  
Firm Size ◽  
Census Data ◽  
Financial Frictions ◽  
Alternative Mechanism ◽  
Large Firms ◽  
Aggregate Fluctuations ◽  
Financial Strength ◽  
The Business Cycle ◽  
The Relationship

This paper uses new confidential Census data to revisit the relationship between firm size, cyclicality, and financial frictions. First, we find that large firms (the top 1 percent by size) are less cyclically sensitive than the rest. Second, high and rising concentration implies that the higher cyclicality of the bottom 99 percent of firms only has a modest impact on aggregate fluctuations. Third, differences in cyclicality are not simply explained by financing, and in fact appear largely unrelated to proxies for financial strength. We instead provide evidence for an alternative mechanism based on the industry scope of the very largest firms. (JEL D22, E32, G32, L25)

Stock Returns and the Business Cycle

CFA Digest ◽  
2005 ◽  
Vol 35 (2) ◽  
pp. 42-43
Author(s):  
Daniel B. Cashion
Keyword(s):  
Business Cycle ◽  
Stock Returns ◽  
The Business Cycle
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