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Entry and Exit Echoes

Author

Listed:
  • Boyan Jovanovic

    (New York University)

  • Chung-Yi Tse

    (Hong Kong University)

Abstract

While aggregate data do not show the investment echoes predicted by vintage-capital models, echoes arise in rates of entry and exit of firms at the industry level. Moreover, industries where prices decline rapidly experience early 'shakeouts'. The relation emerges naturally in a vintage-capital model in which exit of firms sometimes accompanies the replacement of their capital, and in which a shakeout is the first replacement 'echo' of the capital created when the industry is born. (Copyright: Elsevier)

Suggested Citation

  • Boyan Jovanovic & Chung-Yi Tse, 2010. "Entry and Exit Echoes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 514-536, July.
  • Handle: RePEc:red:issued:09-105
    DOI: 10.1016/j.red.2009.07.004
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    References listed on IDEAS

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    Cited by:

    1. Gaigne, Carl & Le Mener, Leo, 2012. "Agricultural Prices, Selection, and the Evolution of Food Industry," Working Papers 125221, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    2. Aaronson, Daniel & French, Eric Baird & Sorkin, Isaac, 2016. "Industry Dynamics and the Minimum Wage: A Putty-Clay Approach," CEPR Discussion Papers 11097, C.E.P.R. Discussion Papers.
    3. Roberto M. Samaniego, 2010. "Entry, Exit, and Investment-Specific Technical Change," American Economic Review, American Economic Association, vol. 100(1), pages 164-192, March.
    4. Hritonenko, Natali & Yatsenko, Yuri, 2010. "Technological innovations, economic renovation, and anticipation effects," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1064-1078, November.

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    Keywords

    Vintage capital;

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