Business cycle evidence on firm entry
Business cycle models with sticky prices and endegenous firm entry make novel predictions on the transmission of shocks through the extensive margin of investment. This paper tests some of these predictions using a vector autoregression with model-based sign restrictions. We find a positive and sign...
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| Format: | UnknownFormat |
| Sprache: | eng |
| Veröffentlicht: |
Frankfurt am Main
Dt. Bundesbank
2008
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| Schriftenreihe: | Discussion paper / Deutsche Bundesbank Series 1, Economic studies
08/2008 |
| Schlagworte: | |
| Online Zugang: | Inhaltsverzeichnis http://opus.zbw-kiel.de/volltexte/2008/7217/pdf/200808dkp.pdf http://www.bundesbank.de/download/volkswirtschaft/dkp/2008/200808dkp.pdf |
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Tag hinzufügen | Zusammenfassung: | Business cycle models with sticky prices and endegenous firm entry make novel predictions on the transmission of shocks through the extensive margin of investment. This paper tests some of these predictions using a vector autoregression with model-based sign restrictions. We find a positive and significant response of firm entry to expansionary shocks to productivity, aggregate spending, monetary policy and entry costs. The estimated response to a monetary expansion does not support the monetary policy transmission mechanism proposed by the model. Insofar as firm startups require labour services, wage stickiness is needed to make the signs of the model responses consistent with the estimated ones. The shapes of the empirical responses suggest that congestion effects in entry make it harder for new firms to survive when the number of startups rises. |
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| Beschreibung: | Zsfassungen in dt. und engl. Sprache |
| Beschreibung: | 27 S. graph. Darst. 30 cm |
| ISBN: | 9783865583949 978-3-86558-394-9 9783865583956 978-3-86558-395-6 |