Comment on Symposium: Development, Firms, and Productivity

An essential issue in economics is understanding why some countries are rich and others poor. A consensus view has emerged in the literature whereby productivity is at the core of the differences in income across nations. Over the last fteen years, progress has been made in our understand- ing of cross-country income differences in part by the increasing recognition of the importance of production heterogeneity— rms—and the allocation of factors of production across them for aggregate outcomes. The progress has been enhanced by the much wider availability of microeconomic data sets of rms across a growing number of countries. There has been a productive interplay of macro- and microeconomic approaches to development. Two papers in this issue of Economía re ect very well the synergy that is growing across sub elds, and both papers provide valuable insights for the overall role of rms and productivity on development. Although both papers offer insights and implications that are broad across many elds in economics, I focus my discussion in the context of the macroeconomic development literature and, in particular, the connection of misallocation and aggregate productivity.