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Diverging Trends in Macro and Micro Volatility: Facts

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  • Diego Comin
  • Sunil Mulani

Abstract

This paper documents the diverging trends in volatility of the growth rate of sales at the aggregate and firm level. We establish that the upward trend in micro volatility is not simply driven by a compositional bias in the sample studied. We argue that this new fact sheds some shadows on the proposed explanations for the decline in aggregate volatility and that, given the symmetry of the diverging trends at the micro and macro level, a common explanation is likely. We conclude by describing one such theory.

Suggested Citation

  • Diego Comin & Sunil Mulani, 2004. "Diverging Trends in Macro and Micro Volatility: Facts," NBER Working Papers 10922, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10922
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    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F1 - International Economics - - Trade
    • D2 - Microeconomics - - Production and Organizations

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