Paper #1670

Título:

Aggregate dynamics in lumpy economies

Autores:

Isaac Baley y Andrés Blanco

Data:

Mayo 2019

Resumen:

In economies with lumpy microeconomic adjustment, we establish structural relationships between the dynamics of the cross-sectional distribution of agents and its steady-state counterpart and discipline these relationships using micro data. Applying our methodology to firm lumpy investment, we discover that the dynamics of aggregate capital are structurally linked to two cross-sectional moments of the capital-to-productivity ratio: its dispersion and its covariance with the time elapsed since the last adjustment. We compute these sufficient statistics using plant–level data on the size and frequency of investments. We find that, in order to explain investment dynamics, the benchmark model with fixed adjustment costs must also feature a precise combination of irreversibility and random opportunities of free adjustment.

Palabras clave:

inaction, lumpiness, transitional dynamics, non convex adjustment costs, sufficient statistics, firm investment, adjustment hazard, Ss models.

Códigos JEL:

D30, D80, E20, E30

Área de investigación:

Macroeconomía y Economía Internacional

Publicado en:

Econometrica (Vol. 89, No. 3, May 2021)

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