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Federal Reserve Bank of Chicago
Working Paper Series
Firm Entry and Macroeconomic Dynamics: A State-level Analysis
Francois Gourio
Todd Messer
Michael Siemer

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.

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Francois Gourio & Todd Messer & Michael Siemer, Firm Entry and Macroeconomic Dynamics: A State-level Analysis, Federal Reserve Bank of Chicago, Working Paper Series WP-2016-1, 31 Jan 2016.
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Keywords: Business cycles; Firms entry; Firms dynamics; Gross Domestic Product; macroeconomics; productivity; population
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