scholarly journals Creative Destruction and Uncertainty

2019 ◽  
Vol 18 (4) ◽  
pp. 1814-1843
Author(s):  
Petr Sedláček
Keyword(s):  
Firm Dynamics ◽  
Creative Destruction ◽  
Technology Shocks ◽  
Dynamics Model ◽  
Vector Autoregressions ◽  
Firm Level ◽  
Productivity Shocks ◽  
Technology Growth ◽  
Structural Vector ◽  
Dot Com

Abstract Uncertainty rises in recessions. But does uncertainty cause downturns or vice versa? This paper argues that counter-cyclical uncertainty fluctuations are a by-product of technology growth. In a firm dynamics model with endogenous technology adoption, faster technology growth widens the dispersion of firm-level productivity shocks, a benchmark uncertainty measure. Moreover, faster technology growth spurs a creative destruction process, generates a temporary downturn, and renders uncertainty counter-cyclical. Estimates from structural vector autoregressions (VARs) on U.S. data confirm the model’s predictions. On average, 1/4 of the cyclical variation in uncertainty is driven by technology shocks. This fraction rises to 2/3 around the “dot-com” bubble.

scholarly journals Macroeconomic Regimes, Technological Shocks and Employment Dynamics

2019 ◽  
Vol 239 (4) ◽  
pp. 599-625
Author(s):  
Tommaso Ferraresi ◽  
Andrea Roventini ◽  
Willi Semmler
Keyword(s):  
Technology Shocks ◽  
Vector Autoregressions ◽  
Productivity Shocks ◽  
Hours Worked ◽  
Employment Dynamics ◽  
Large Display ◽  
The Face ◽  
Negative Effect ◽  
Impact Of Technology ◽  
The Impact

Abstract The debate about the impact of technology on employment has always had a central role in economic theory. At the same time, the nexus of technological progress and employment might depend on macroeconomic regimes. In this work we investigate the interrelations among technology, output and employment in the U.S. economy in growth recessions vs. growth expansions. More precisely, using U.S. data we estimate different threshold vector autoregressions (TVARs) with TFP, hours, and GDP, employing the latter as threshold variable, and assess the generalized impulse responses of GDP and hours as to TFP shocks. For our entire period of observation, 1957Q1–2011Q4, positive technology shocks, while spurring GDP growth, by and large, display a negative effect on hours worked in growth recessions, but they are not significantly different from zero in good times. Yet, since the mid eighties (1984Q1–2011Q4) productivity shocks increase hours worked in low growth periods. The results are mainly driven by the response of labor along the extensive margin (number of employees), and remain persistent so in the face of a battery of robustness checks.

The Nature of Firm Growth

2021 ◽  
Vol 111 (2) ◽  
pp. 547-579
Author(s):  
Vincent Sterk ◽  
Petr Sedláček ◽  
Benjamin Pugsley
Keyword(s):  
Firm Size ◽  
Firm Growth ◽  
High Growth ◽  
Firm Dynamics ◽  
Dynamics Model ◽  
Firm Level ◽  
Firm Size Distribution ◽  
Ex Post ◽  
Ex Ante ◽  
Macroeconomic Effects

About one-half of all startups fail within five years, and those that survive grow at vastly different speeds. Using Census microdata, we estimate that most of these differences are determined by ex ante heterogeneity rather than persistent ex post shocks. Embedding such heterogeneity in a firm dynamics model shows that the presence of ex ante heterogeneity (i) is a key determinant of the firm size distribution and firm dynamics, (ii) can strongly affect the macroeconomic effects of firm-level frictions, and (iii) helps understand the recently documented decline in business dynamism by showing a disappearance of high-growth startups (“gazelles”) since the mid-1980s. (JEL D22, D24, E24, J23, L11, M13)

Structural Vector Autoregressions

2008 ◽  
pp. 1-5 ◽  
Author(s):  
Jesús Fernández-Villaverde ◽  
Juan F. Rubio-Ramírez
Keyword(s):  
Vector Autoregressions ◽  
Structural Vector

scholarly journals Shock Restricted Structural Vector-Autoregressions

2017 ◽  
Author(s):  
Sydney Ludvigson ◽  
Sai Ma ◽  
Serena Ng
Keyword(s):  
Vector Autoregressions ◽  
Structural Vector

scholarly journals Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923

2019 ◽  
Vol 79 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Tetsuji Okazaki ◽  
Toshihiro Okubo ◽  
Eric Strobl
Keyword(s):  
Creative Destruction ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Machine Technology ◽  
Kanto Earthquake ◽  
Level Data ◽  
Firm Level Data ◽  
Before And After

The Great Kanto Earthquake occurred on 1 September 1923 and inflicted serious damage on Yokohama City. About 90 percent of the factories in Yokohama City were burnt down or completely destroyed. However, these manufacturing industries appear to have swiftly recovered in the aftermath of the damage. This article investigates the role of creative destruction due to the Great Kanto Earthquake. Using firm-level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction, that is, upgrade of machine technology and/or survival of efficient firms. We find further collaborating evidence of this at the prefecture level.

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