Models of Growth and Firm Heterogeneity
By Erzo G. J. Luttmer. 2010
140 citations recorded by the source corpus.
Although employment at individual firms tends to be highly nonstationary, the employment size distribution of all firms in the United States appears to be stationary. It closely resembles a Pareto distribution. There is a lot of entry and exit, mostly of small firms. This review surveys general equilibrium models that can be used to interpret these facts and explores the role of innovation by new and incumbent firms in determining aggregate growth. The existence of a balanced growth path with a stationary employment size distribution depends crucially on assumptions made about the cost of entry. Some type of labor must be an essential input in setting up new firms.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/8db23a758997bed31ed9540231294e48e53891d0
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In Economics and Econometrics
Citations in the corpus
- Demographic Origins of the Startup Deficit (2019, unknown): “18See, e.g., Luttmer (2010) on the link between the number of firms and number of workers. firms and thus no effect on the expected value of a potential entrant.”
- Heterogeneous Markups, Growth, and Endogenous Misallocation (2020, background): “See also Garcia-Macia et al. (2016) and Luttmer (2010).”
- Innovation by entrants and incumbents (2015, unknown): “See Luttmer (2010b) for a model with this feature. plants).”