Endogenous Growth through Firm Entry, Exit and Imitation
AbstractA simple dynamic general equilibrium model is set up in which firms face idiosyncratic productivity shocks. Firms whose productivity has fallen too low exit, and entrants try to imitate the practice of existing firms, so that the expected productivity of entering firms is a function of current average productivity. Because of the resulting selection and imitation process, aggregate productivity in the economy grows endogenously. When calibrated to U.S. data, the model suggests that around 50 percent of productivity growth may be due to such a selection eÂ¤ect
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 532.
Date of creation: 03 Dec 2006
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Growth; Selection; Imitation; Entry and Exit;
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- Markus Poschke, 2006.
"Employment Protection, Firm Selection, and Growth,"
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- Anna Ilyina & Roberto M. Samaniego, 2009.
"A Multi-industry Model of Growth with Financing Constraints,"
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- Roberto Samaniego & Anna Ilyina, 2009. "A Multi-industry Model of Growth with Financing Constraints," 2009 Meeting Papers 467, Society for Economic Dynamics.
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