Working Paper

Firm Entry and Macroeconomic Dynamics: A State-level Analysis


Abstract: Using an annual panel of U.S. states over the period 1982-2014, we estimate the response of macroeconomic variables to a shock to the number of new firms (startups). We find that these shocks have significant effects that persist for many years on real gross domestic product, productivity and population. This is consistent with simple models of firm dynamics where a ?missing generation? of firms affects productivity persistently.

Keywords: Business cycles; Firms entry; Firms dynamics; Gross Domestic Product; macroeconomics; productivity; population;

JEL Classification: E31; E32; L1; L16;

Access Documents

File(s): File format is application/pdf https://www.chicagofed.org/~/media/publications/working-papers/2016/wp2016-01-pdf.pdf
Description: Full text

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2016-01-31

Number: WP-2016-1

Pages: 14 pages