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The Role of Individual Firms in Aggregate Fluctuations: Evidence from Hungary

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  • Norbert Czinkán

    (Candidate at the University of Alicante)

Abstract

This paper investigates the role of activities by Hungarian firms in generating aggregate fluctuations for the time period 2000–2013. The paper decomposes aggregated sales volatility into a macro-sectoral and firm-specific component and finds that shocks to individual firms contribute significantly to aggregate fluctuations. The relative contribution of idiosyncratic shocks to sales volatility at the aggregate level is 55.5 per cent for the whole economy and 56.4 per cent for the manufacturing sector. The main mechanism through which firm fluctuations manifest themselves in aggregate fluctuations is input–output linkages.

Suggested Citation

  • Norbert Czinkán, 2017. "The Role of Individual Firms in Aggregate Fluctuations: Evidence from Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(2), pages 40-63.
    • Handle: RePEc:mnb:finrev:v:16:y:2017:i:2:p:40-63
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    References listed on IDEAS

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    More about this item

    Keywords

    Aggregate fluctuations; Firm-level shocks; Macro-sectoral shocks;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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