Projects per year
Abstract / Description of output
This paper studies the analytics of a canonical model of lumpy microeconomic adjustment. We provide a novel characterization of the implied aggregate dynamics. In general, the distribution of firm outcomes follows a simple and intuitive law of motion that links aggregate outcomes to rates of adjustment. Analytical approximations reveal, however, that the aggregate dynamics are approximately invariant to a relevant range of adjustment costs. This neutrality is an aggregation result that emerges from a symmetry property in the distributional dynamics, independent of market equilibrium considerations. Quantitative illustrations confirm these results for parameterizations used in the employment and price adjustment literatures.
Original language | English |
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Pages (from-to) | 128-147 |
Journal | Journal of Monetary Economics |
Volume | 101 |
Early online date | 19 Jul 2018 |
DOIs | |
Publication status | Published - Jan 2019 |
Keywords / Materials (for Non-textual outputs)
- lumpy microeconomic adjustment
- Ss model
- cross-sectional dynamics
- aggregate employment dynamics.
Fingerprint
Dive into the research topics of 'Fixed adjustment costs and aggregate fluctuations'. Together they form a unique fingerprint.Projects
- 1 Finished
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MacCaLM: Labour and Credit Market Foundations of the Macroeconomy
Moore, J., Belot, M., Elsby, M., Guell, M., Kircher, P., Rodriguez Mora, S., Snell, A., Thomas, J., Visschers, L., Worrall, T. & Zymek, R.
1/06/15 → 31/05/22
Project: Research
Research output
- 1 Paper
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Fixed adjustment costs and aggregate fluctuations
Elsby, M. & Michaels, R., 23 Dec 2014. 50 p.Research output: Contribution to conference › Paper › peer-review