Related papers: Not-so-Cleansing Recessions
This paper investigates the causal effect of export intensity on productivity and other firm-level outcomes with a dose-response function. After positing that export intensity acts as a continuous treatment, we investigate counterfactual…
We consider in a market model the cooperative emergence of value due to a positive feedback between perception of needs and demand. Here we consider also a negative feedback from production of the traded products, and find that this…
How should taxes on externality-generating activities be adjusted if they are regressive? In our model, the government raises revenue using distortionary income and commodity taxes. If more or less productive people have identical tastes…
Recommender systems may suffer from congestion, meaning that there is an unequal distribution of the items in how often they are recommended. Some items may be recommended much more than others. Recommenders are increasingly used in domains…
The American economy can be thought of as a highly connected random network in terms of both its technological and informational connections. The cumulative size of economic recessions, the fall in output from peak to trough, is analysed…
Markets have internal dynamics leading to excess volatility and other phenomena that are difficult to explain using rational expectations models. This paper studies these using a nonequilibrium price formation rule, developed in the context…
We study a general class of consumption-savings problems with recursive preferences. We characterize the sign of the consumption response to arbitrary shocks in terms of the product of two sufficient statistics: the elasticity of…
Schumpeter's (1939) distinction between changes in the form of the production function corresponding to innovation, and shifts along the production function corresponding to factor substitution, does not preclude that the underlying…
Do firm dynamics matter for the transmission of monetary policy? Empirically, the startup rate declines following a monetary contraction, while the exit rate increases, both of which reduce aggregate employment. I present a model that…
Jarring events inspiring reflection, known as ``shocks" in the literature, are the motive force in explaining changes in employee embeddedness and retention within the unfolding model of labor turnover. Substantial research effort has…
This paper studies the economic role of persistent dispersion in allocations across agents. We develop a tractable model in which firms allocate resources under imperfect information and behavioral updating, generating sustained…
The connection between dissipation and symmetry breaking is a long-standing enigma in statistical physics. It is intimately connected to the quest of a non-equilibrium functional whose minimization gives the non-equilibrium steady state…
We investigate a multi-household DSGE model in which past aggregate consumption impacts the confidence, and therefore consumption propensity, of individual households. We find that such a minimal setup is extremely rich, and leads to a…
To determine the welfare implications of price changes in demand data, we introduce a revealed preference relation over prices. We show that the absence of cycles in this relation characterizes a consumer who trades off the utility of…
This paper examines how loss aversion affects wages offered by employers and accepted by job seekers. I introduce a behavioral search model with monopsonistic firms making wage offers to job seekers who experience steeper disutility from…
We develop an analytically tractable model featuring heterogeneous workers and firms, where labor markets clear through a one-to-many sorting mechanism. Firms determine both the number and composition of their employees, shaping (1) the…
In this chapter the complex systems are discussed in the context of economic and business policy and decision making. It will be showed and motivated that social systems are typically chaotic, non-linear and/or non-equilibrium and therefore…
The global production of electric goods is at an all-time high, causing negative environmental and health impacts as well as a continuing depletion of natural resources. Considering the worsening global climate change, a transition of…
Firms in denser areas are more productive, a pattern attributed to agglomeration economies and firm selection. To disentangle these two channels, the popular approach of Combes et al. (2012, ECTA) critically assumes that total factor…
Technological improvement is the most important cause of long-term economic growth. We study the effects of technology improvement in the setting of a production network, in which each producer buys input goods and converts them to other…