Search Results

Showing results 1 to 7 of approximately 7.

(refine search)
SORT BY: PREVIOUS / NEXT
Keywords:heterogeneous firms 

Report
The marginal propensity to hire

This paper studies the link between firm-level financial constraints and employment decisions, as well as the implications for the propagation of aggregate shocks. I exploit the idea that, when the financial constraint binds, a firm adjusts its employment in response to cash flow shocks. I identify such shocks from changes to business rates, a U.K. tax based on a periodically estimated value of the property occupied by the firm. A 2010 revaluation implied that similar firms, occupying similar properties in narrowly defined geographical locations, experienced different tax changes, allowing me ...
Staff Reports , Paper 875

Working Paper
Offshore Production and Business Cycle Dynamics with Heterogeneous Firms

To examine the effect of offshoring through vertical FDI on the international transmission of business cycles, I propose a two-country model in which firms endogenously choose the location of their production plants over the business cycle. Firms face a sunk cost to enter the domestic market and an additional fixed cost to produce offshore. As such, the offshoring decision depends on the firm-specific productivity and on fluctuations in the relative cost of effective labor. The model generates a procyclical pattern of offshoring and dynamics along its extensive margin that are consistent with ...
Supervisory Research and Analysis Working Papers , Paper RPA 16-1

Report
Firms’ Precautionary Savings and Employment during a Credit Crisis

Can the macroeconomic effects of credit supply shocks be large even when a small share of firms are credit-constrained? I use U.K. firm-level accounting data to discipline a heterogeneous-firm model where the interaction between real and financial frictions induces precautionary cash holdings. In the data, firms increased their cash ratios during the last recession, and cash-intensive firms displayed higher employment growth. A tightening of firms’ credit conditions generates the same dynamics in the model. Unconstrained firms pre-emptively respond to credit supply shocks; this ...
Staff Reports , Paper 904

Working Paper
Risk-Taking, Capital Allocation and Optimal Monetary Policy

We study the role of firm heterogeneity in affecting business cycle dynamics and optimal stabilization policy. Firms differ in their degree of cyclicality, and hence, exposure to aggregate risk, leading to firm-specific risk premia that influence resource allocations. The heterogeneous firm economy can be recast in a representative firm formulation, but where total factor productivity (TFP) is endogenous and depends on the resource allocation. The model uncovers a novel tradeoff between the long-run level and volatility of TFP. Inefficiencies distort this tradeoff and result in either ...
Working Paper Series , Paper WP-2021-01

Working Paper
Liquidity Premia, Price-Rent Dynamics, and Business Cycles

n the U.S. economy during the past 25 years, house prices exhibit fluctuations considerably larger than house rents, and these large fluctuations tend to move together with business cycles. We build a simple theoretical model to characterize these observations by showing the tight connection between price-rent fluctuation and the liquidity constraint faced by productive firms. After developing economic intuition for this result, we estimate a medium-scale dynamic general equilibrium model to assess the empirical importance of the role the price-rent fluctuation plays in the business cycle. ...
FRB Atlanta Working Paper , Paper 2014-15

Working Paper
Automation, Market Concentration, and the Labor Share

Since the early 2000s, a rising share of production has been concentrated in a small number of superstar firms. We argue that the rise of automation technologies and the cross-sectional variation of robot use rates have contributed to the increases in industrial concentration. Motivated by empirical evidence, we build a general equilibrium model with heterogeneous firms, endogenous automation decisions, and variable markups. Firms choose between two types of technologies, one uses workers only and the other uses both workers and robots subject to an idiosyncratic fixed cost of robot ...
Working Paper Series , Paper 2022-05

Working Paper
Discount Shock, Price-Rent Dynamics, and the Business Cycle

The price-rent ratio in commercial real estate is highly volatile, and its variation comoves with the business cycle. To account for these two facts, we develop a dynamic general equilibrium model that explicitly introduces a rental market and incorporates the liquidity constraint on an individual firm's production as a key ingredient. Our estimation identifies the discount shock as the most important factor in driving price-rent dynamics and linking the dynamics in the real estate market to those in the real economy. We illustrate the importance of the liquidity premium and endogenous total ...
FRB Atlanta Working Paper , Paper 2020-7

FILTER BY year

FILTER BY Content Type

Working Paper 5 items

Report 2 items

FILTER BY Author

Melcangi, Davide 2 items

Miao, Jianjun 2 items

Wang, Pengfei 2 items

Zha, Tao 2 items

David, Joel M. 1 items

Firooz, Hamid 1 items

show more (5)

FILTER BY Jel Classification

E44 5 items

E32 3 items

E22 2 items

E24 2 items

G01 2 items

G32 2 items

show more (10)

FILTER BY Keywords

PREVIOUS / NEXT