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Uncertainty-driven growth

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  • Oikawa, Koki

Abstract

In this paper, I present a model in which firm-level uncertainty raises aggregate productivity growth. The mechanism for this is learning-by-doing in the research sector: firms undertake research to reduce uncertainty, which results in social knowledge accumulation that improves the productivity of future research. The model explains the positive correlation between TFP growth and dispersion in manufacturing industries.

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File URL: http://www.sciencedirect.com/science/article/B6V85-4Y05DF9-1/2/1e491377fc0274d0c3285466e47a76de
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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 34 (2010)
Issue (Month): 5 (May)
Pages: 897-912

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Handle: RePEc:eee:dyncon:v:34:y:2010:i:5:p:897-912

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Web page: http://www.elsevier.com/locate/jedc

Related research

Keywords: Firm-level uncertainty Knowledge accumulation TFP growth and dispersion Bayesian updating;

References

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  1. Kose, M. Ayhan & Prasad, Eswar S. & Terrones, Marco E., 2006. "How do trade and financial integration affect the relationship between growth and volatility?," Journal of International Economics, Elsevier, vol. 69(1), pages 176-202, June.
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  8. Malkiel, Burton & Campbell, John & Lettau, Martin & Xu, Yexiao, 2001. "Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk," Scholarly Articles 3128707, Harvard University Department of Economics.
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  10. Imbs, Jean, 2007. "Growth and volatility," Journal of Monetary Economics, Elsevier, vol. 54(7), pages 1848-1862, October.
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  19. Steven J. Davis & John Haltiwanger & Ron Jarmin & Javier Miranda, 2006. "Volatility and Dispersion in Business Growth Rates: Publicly Traded versus Privately Held Firms," NBER Working Papers 12354, National Bureau of Economic Research, Inc.
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  22. Elena Andreou & Marianne Sensier & Alessandra Pelloni, 2008. "Is Volatility Good for Growth?," Working Paper Series 37-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
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Citations

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Cited by:
  1. Boyan Jovanovic & Chung-Yi Tse, 2006. "Creative Destruction in Industries," NBER Working Papers 12520, National Bureau of Economic Research, Inc.
  2. Jetter, Michael, 2013. "Volatility and Growth: Governments are Key," IZA Discussion Papers 7826, Institute for the Study of Labor (IZA).
  3. Mahadevan, Renuka & Suardi, Sandy, 2011. "The effects of uncertainty dynamics on exports, imports and productivity growth," Journal of Asian Economics, Elsevier, vol. 22(2), pages 174-188, April.
  4. Michael Jetter, 2013. "Volatility and Growth: An Explanation for the Disagreement," DOCUMENTOS DE TRABAJO CIEF 010944, UNIVERSIDAD EAFIT.

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