The Granular Origins of Aggregate Fluctuations

By Xavier Gabaix. 2009

1,431 citations recorded by the source corpus.

Subfields: Computational Mechanics, Condensed Matter Physics, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/6606335ebd7e9c125ac11a0dc4ebb1cd7061d320

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Citations in the corpus

Credit Market Disruptions and Liquidity Spillover Effects in the Supply Chain (2020, neutral): “The paper is important in light of the burgeoning literature on the transmission of idiosyncratic shocks (e.g., Raddatz 2010; Gabaix 2011; Acemoglu et al. 2012; Carvalho 2014).”
Technological Innovation, Resource Allocation, and Growth (2012, neutral): “In particular, Gabaix (2011) proposes that if the distribution of firm size is sufficiently fat-tailed, as is the case in the US and in most of the world, firm-specific shocks can have substantial effects on aggregate quantities due to the failure of the law of large numbers.”
How Much Do Idiosyncratic Bank Shocks Affect Investment? Evidence from Matched Bank-Firm Loan Data (2017, methodology): “…our approach relative to earlier work is that we are able to estimate the shocks directly from the loan data and hence do not need to rely on instrumental variables that are correlated 1 Gabaix (2011) coined the term “granular” because it reflects the fact that firms are not infinitesimal in size.”
Intermediate Goods and Weak Links in the Theory of Economic Development (2011, background): “(Notice that _ m is a hump-shaped function of _ x that is maximized at _ x = σ.) Second, the effect of changes in productivity”
Sectoral vs. Aggregate Shocks: A Structural Factor Analysis of Industrial Production (2008, positive): “To capture these two distinct effects, it useful to further decompose gt as 1 Gabaix (2010) refers to the term 1 1N it it i w x N as the “granular residual.””
Network Analysis of World Trade using the BACI-CEPII Dataset (2014, neutral): “Extending an argument fully explored by Gabaix (2009, 2011), when the distribution of countries is fat-tailed, the central limit theorem breaks down, and idiosyncratic shocks to heavily connected countries explain a non-trivial fraction of aggregate world fluctuations.”
Networks, Shocks, and Systemic Risk (2015, background): “…network.4 Finally, Cabrales, Gale, and Gottardi (2015) provide a unified treatment of the previous three papers, highlighting various 3Relatedly, Gabaix (2011) argues that microeconomic shocks can lead to aggregate fluctuations if the firm-size distribution within the economy exhibits a heavy…”
Are US Industries Becoming More Concentrated?* (2019, neutral): “Consistent with the evidence in Gabaix (2011), we find that despite their shrinking numbers, public firms still represent a large fraction of the U.S. economy. in the extreme range, indicating that 73% of the industries have lost over 40% of their publicly traded peers.”