IDEAS home Printed from https://ideas.repec.org/h/wsi/wschap/9789812702258_0010.html
   My bibliography  Save this book chapter

Business Cycle Fluctuations And Firms’ Size Distribution Dynamics

In: Industry And Labor Dynamics The Agent-Based Computational Economics Approach

Author

Listed:
  • DOMENICO DELLI GATTI

    (Institute of Quantitative Methods and Economic Theory, Catholic University of Milan, Largo Gemelli1, I-20123 Milan, Italy)

  • CORRADO DI GUILMI

    (Department of Economics, Università Politecnica delle Marche, Piaz.le, Martelli 8, I-60121 Ancona, Italy)

  • EDOARDO GAFFEO

    (Department of Economics, University of Trento, Via Inama 5, I-33100 Trento, Italy)

  • GIANFRANCO GIULIONI

    (Department of Economics, Università Politecnica delle Marche, Piaz.le, Martelli 8, I-60121 Ancona, Italy)

  • MAURO GALLEGATI

    (Department of Economics, Università Politecnica delle Marche, Piaz.le, Martelli 8, I-60121 Ancona, Italy)

  • ANTONIO PALESTRINI

    (Department of Law in Society and History, University of Teramo, Via Crucioli 120, I-64100 Teramo, Italy)

Abstract

Power law behavior is an emerging property of many economic models. In this paper we emphasize the fact that power law distributions are persistent but not time invariant. In fact, the scale and the shape of the firms’ size distribution fluctuate over time. In particular on a log-log space both the intercept and the slope of the power law distribution of firms’ size change over the cycle: during expansions (recessions) the straight line representing the distribution shifts up and becomes less steep (steeper). We show that the empirical distributions generated by simulations of the model presented by [11] mimic real empirical distributions remarkably well.

Suggested Citation

  • Domenico Delli Gatti & Corrado Di Guilmi & Edoardo Gaffeo & Gianfranco Giulioni & Mauro Gallegati & Antonio Palestrini, 2004. "Business Cycle Fluctuations And Firms’ Size Distribution Dynamics," World Scientific Book Chapters, in: Roberto Leombruni & Matteo Richiardi (ed.), Industry And Labor Dynamics The Agent-Based Computational Economics Approach, chapter 10, pages 199-221, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812702258_0010
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/pdf/10.1142/9789812702258_0010
    Download Restriction: Ebook Access is available upon purchase.
    File URL: https://www.worldscientific.com/doi/abs/10.1142/9789812702258_0010
    Download Restriction: Ebook Access is available upon purchase.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Yoshi Fujiwara, 2003. "Zipf Law in Firms Bankruptcy," Papers cond-mat/0310062, arXiv.org.
    2. Takayuki Mizuno & Makoto Katori & Hideki Takayasu & Misako Takayasu, 2003. "Statistical Laws in the Income of Japanese Companies," Papers cond-mat/0308365, arXiv.org.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matteo Richiardi, 2006. "Toward a Non-Equilibrium Unemployment Theory," Computational Economics, Springer;Society for Computational Economics, vol. 27(1), pages 135-160, February.
    2. Grilli, Ruggero & Tedeschi, Gabriele & Gallegati, Mauro, 2020. "Business fluctuations in a behavioral switching model: Gridlock effects and credit crunch phenomena in financial networks," Journal of Economic Dynamics and Control, Elsevier, vol. 114(C).
    3. Irina Bashkirtseva & Alexander Pisarchik & Lev Ryashko & Tatyana Ryazanova, 2016. "Excitability And Complex Mixed-Mode Oscillations In Stochastic Business Cycle Model," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 19(01n02), pages 1-16, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pascal Seppecher & Isabelle Salle, 2015. "Deleveraging crises and deep recessions: a behavioural approach," Applied Economics, Taylor & Francis Journals, vol. 47(34-35), pages 3771-3790, July.
    2. Wright, Ian, 2009. "Implicit Microfoundations for Macroeconomics," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-27.
    3. D. Delli Gatti & C. Di Guilmi & M. Gallegati & E. Gaffeo & G. Giulioni & A. Palestrini, 2008. "Scaling Laws In The Macroeconomy," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 131-138.
    4. Junho Na & Jeong-dong Lee & Chulwoo Baek, 2017. "Is the service sector different in size heterogeneity?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(1), pages 95-120, April.

    More about this item

    Keywords

    Simulation; Agent-Based; Computational Economics; Labor; Industrial Dynamics; Innovation; Cluster; Firm Behavior;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:wschap:9789812702258_0010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscientific.com/page/worldscibooks .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.