On the irreconcilability of Pareto and Gibrat laws
AbstractIf business firms face a multiplicative growth process in which their growth rates are Laplace distributed and independent from their sizes, the size cannot be distributed according to a stationary Pareto distribution. Recent contributions, using formal arguments, seem to contrast with these statements. We prove that the proposed formal results are wrong.
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Bibliographic InfoArticle provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.
Volume (Year): 388 (2009)
Issue (Month): 7 ()
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Firm growth; Gibrat’s law; Power law distribution; Laplace distribution;
Other versions of this item:
- Giulio Bottazzi, 2007. "On the Irreconcilability of Pareto and Gibrat Laws," LEM Papers Series 2007/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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