Show simple item record

Aggregate Dynamics in Lumpy Economies

dc.contributor.authorBaley, Isaac
dc.contributor.authorBlanco, Andrés
dc.date.accessioned2021-06-02T21:10:19Z
dc.date.available2022-06-02 17:10:18en
dc.date.available2021-06-02T21:10:19Z
dc.date.issued2021-05
dc.identifier.citationBaley, Isaac; Blanco, Andrés (2021). "Aggregate Dynamics in Lumpy Economies." Econometrica 89(3): 1235-1264.
dc.identifier.issn0012-9682
dc.identifier.issn1468-0262
dc.identifier.urihttps://hdl.handle.net/2027.42/167852
dc.publisherWiley Periodicals, Inc.
dc.publisherPrinceton University Press
dc.subject.othersufficient statistics
dc.subject.othernon‐convex adjustment costs
dc.subject.otherinvestment
dc.subject.otherstate‐dependence
dc.subject.othertime‐dependence
dc.subject.otherlumpiness
dc.subject.otherInaction
dc.subject.othertransitional dynamics
dc.titleAggregate Dynamics in Lumpy Economies
dc.typeArticle
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelEconomics
dc.subject.hlbtoplevelBusiness and Economics
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/167852/1/ecta200296.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/167852/2/ecta200296_am.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/167852/3/ecta200296-sup-0001-onlineappendix.pdf
dc.identifier.doi10.3982/ECTA17344
dc.identifier.sourceEconometrica
dc.identifier.citedreferenceDixit, A. K., and R. Pindyck ( 1994 ): Investment Under Uncertainty. Princeton: Princeton University Press.
dc.identifier.citedreferenceCaplin, A., and J. Leahy ( 1991 ): “ State‐Dependent Pricing and the Dynamics of Money and Output,” The Quarterly Journal of Economics, 106 ( 3 ), 683 – 708.
dc.identifier.citedreferenceCaplin, A., and J. Leahy ( 1997 ): “ Aggregation and Optimization With State‐Dependent Pricing,” Econometrica, 65 ( 3 ), 601 – 625.
dc.identifier.citedreferenceCaplin, A., and D. F. Spulber ( 1987 ): “ Menu Costs and the Neutrality of Money,” The Quarterly Journal of Economics, 113, 287 – 303.
dc.identifier.citedreferenceCarvalho, C., and F. Schwartzman ( 2015 ): “ Selection and Monetary Non‐Neutrality in Time‐Dependent Pricing Models,” Journal of Monetary Economics, 76, 141 – 156.
dc.identifier.citedreferenceChen, Z., X. Jiang, Z. Liu, J. C. Suárez Serrato, and D. Xu ( 2019 ): “ Tax Policy and Lumpy Investment Behavior: Evidence From China’s VAT Reform,” NBER Working Paper No. 26336, National Bureau of Economic Research.
dc.identifier.citedreferenceCooper, R., and J. L. Willis ( 2004 ): “ A Comment on the Economics of Labor Adjustment: Mind the Gap,” The American Economic Review, 94 ( 4 ), 1223 – 1237.
dc.identifier.citedreferenceCooper, R. W., and J. C. Haltiwanger ( 2006 ): “ On the Nature of Capital Adjustment Costs,” The Review of Economic Studies, 73 ( 3 ), 611 – 633.
dc.identifier.citedreferenceLanteri, A. ( 2018 ): “ The Market for Used Capital: Endogenous Irreversibility and Reallocation Over the Business Cycle,” American Economic Review, 108 ( 9 ), 2383 – 2419.
dc.identifier.citedreferenceLanteri, A., P. Medina, and E. Tan ( 2020 ): “ Capital‐Reallocation Frictions and Trade Shocks,” CEPR Discussion Paper No. DP14832.
dc.identifier.citedreferenceLuo, S., and D. Villar ( 2020 ): “ The Skewness of the Price Change Distribution: A New Touchstone for Sticky Price Models,” Journal of Money, Credit and Banking.
dc.identifier.citedreferenceMidrigan, V. ( 2011 ): “ Menu Costs, Multiproduct Firms, and Aggregate Fluctuations,” Econometrica, 79 ( 4 ), 1139 – 1180.
dc.identifier.citedreferenceMoll, B. ( 2014 ): “ Productivity Losses From Financial Frictions: Can Self‐Financing Undo Capital Misallocation? ” American Economic Review, 104 ( 10 ), 3186 – 3221.
dc.identifier.citedreferenceNakamura, E., and J. Steinsson ( 2010 ): “ Monetary Non‐Neutrality in a Multisector Menu Cost Model,” The Quarterly Journal of Economics, 125 ( 3 ), 961 – 1013.
dc.identifier.citedreferenceNakamura, E., J. Steinsson, P. Sun, and D. Villar ( 2018 ): “ The Elusive Costs of Inflation: Price Dispersion During the us Great Inflation,” The Quarterly Journal of Economics, 133 ( 4 ), 1933 – 1980.
dc.identifier.citedreferenceOberfield, E. ( 2013 ): “ Productivity and Misallocation During a Crisis: Evidence From the Chilean Crisis of 1982,” Review of Economic Dynamics, 16 ( 1 ), 100 – 119.
dc.identifier.citedreferenceOttonello, P. ( 2018 ): “ Capital Unemployment,” Working Paper, University of Michigan.
dc.identifier.citedreferenceSalgado, S., F. Guvenen, and N. Bloom ( 2019 ): “ Skewed Business Cycles,” NBER Working Paper No. 26565, National Bureau of Economic Research.
dc.identifier.citedreferenceSveen, T., and L. Weinke ( 2007 ): “ Lumpy Investment, Sticky Prices, and the Monetary Transmission Mechanism,” Journal of Monetary Economics, 54, 23 – 36.
dc.identifier.citedreferenceThomas, J. ( 2002 ): “ Is Lumpy Investment Relevant for the Business Cycle? ” Journal of Political Economy, 110 ( 3 ), 508 – 534.
dc.identifier.citedreferenceVavra, J. ( 2014 ): “ Inflation Dynamics and Time‐Varying Volatility: New Evidence and an Ss Interpretation,” The Quarterly Journal of Economics, 129 ( 1 ), 215 – 258.
dc.identifier.citedreferenceVeracierto, M. L. ( 2002 ): “ Plant‐Level Irreversible Investment and Equilibrium Business Cycles,” American Economic Review, 92 ( 1 ), 181 – 197.
dc.identifier.citedreferenceVerona, F. ( 2014 ): “ Investment Dynamics With Information Costs,” Journal of Money, Credit and Banking, 46 ( 8 ), 1627 – 1656.
dc.identifier.citedreferenceWinberry, T. ( 2021 ): “ Lumpy Investment, Business Cycles, and Stimulus Policy,” American Economic Review, 111 ( 1 ), 364 – 396.
dc.identifier.citedreferenceZwick, E., and J. Mahon ( 2017 ): “ Tax Policy and Heterogeneous Investment Behavior,” American Economic Review, 107 ( 1 ), 217 – 248.
dc.identifier.citedreferenceAbel, A. B., and J. C. Eberly ( 1996 ): “ Optimal Investment With Costly Reversibility,” The Review of Economic Studies, 63 ( 4 ), 581 – 593.
dc.identifier.citedreferenceAlexandrov, A. ( 2020 ): “ The Effects of Trend Inflation on Aggregate Dynamics and Monetary Stabilization,” CRC TR 224 Discussion Paper No. 216, University of Mannheim.
dc.identifier.citedreferenceÁlvarez, F., and F. Lippi ( 2014 ): “ Price Setting With Menu Cost for Multiproduct Firms,” Econometrica, 82 ( 1 ), 89 – 135.
dc.identifier.citedreferenceÁlvarez, F., and F. Lippi ( 2021 ): “ The Analytic Theory of a Monetary Shock,” NBER Working Papers Series No. 28464, National Bureau of Economic Research.
dc.identifier.citedreferenceGabaix, X., J.‐M. Lasry, P.‐L. Lions, and B. Moll ( 2016 ): “ The Dynamics of Inequality,” Econometrica, 84 ( 6 ), 2071 – 2111.
dc.identifier.citedreferenceGourio, F., and A. K. Kashyap ( 2007 ): “ Investment Spikes: New Facts and a General Equilibrium Exploration,” Journal of Monetary Economics, 54, 1 – 22.
dc.identifier.citedreferenceHawkins, W., R. Michaels, and J. Oh ( 2015 ): “ The Joint Dynamics of Capital and Employment at the Plant Level,” Technical Report, Yeshiva University.
dc.identifier.citedreferenceHouse, C. L. ( 2014 ): “ Fixed Costs and Long‐Lived Investments,” Journal of Monetary Economics, 68, 86 – 100.
dc.identifier.citedreferenceKehrig, M., and N. Vincent ( 2019 ): “ Good Dispersion, Bad Dispersion,” NBER Working Paper No. 25923, National Bureau of Economic Research.
dc.identifier.citedreferenceKhan, A., and J. K. Thomas ( 2008 ): “ Idiosyncratic Shocks and the Role of Nonconvexities in Plant and Aggregate Investment Dynamics,” Econometrica, 76 ( 2 ), 395 – 436.
dc.identifier.citedreferenceKurmann, A., and N. Petrosky‐Nadeau ( 2007 ): “ Search Frictions in Physical Capital Markets as a Propagation Mechanism,” CIRPEE Working Paper 07‐12.
dc.identifier.citedreferenceÁlvarez, F., M. Beraja, M. Gonzalez‐Rozada, and P. A. Neumeyer ( 2018 ): “ From Hyperinflation to Stable Prices: Argentina’s Evidence on Menu Cost Models,” The Quarterly Journal of Economics, 134 ( 1 ), 451 – 505.
dc.identifier.citedreferenceÁlvarez, F., H. Le Bihan, and F. Lippi ( 2016 ): “ The Real Effects of Monetary Shocks in Sticky Price Models: A Sufficient Statistic Approach,” American Economic Review, 106 ( 10 ), 2817 – 2851.
dc.identifier.citedreferenceÁlvarez, F., F. Lippi, and A. Oskolkov ( 2020 ): “ The Macroeconomics of Sticky Prices With Generalized Hazard Functions,” NBER Working Paper No. 27434, National Bureau of Economic Research.
dc.identifier.citedreferenceAlvarez, F., F. Lippi, and L. Paciello ( 2016 ): “ Monetary Shocks in Models With Inattentive Producers,” The Review of Economic Studies, 83 ( 2 ), 421 – 459.
dc.identifier.citedreferenceAsker, J., A. Collard‐Wexler, and J. De Loecker ( 2014 ): “ Dynamic Inputs and Resource (Mis)Allocation,” Journal of Political Economy, 122 ( 5 ), 1013 – 1063.
dc.identifier.citedreferenceBachmann, R., and C. Bayer ( 2014 ): “ Investment Dispersion and the Business Cycle,” American Economic Review, 104 ( 4 ), 1392 – 1416.
dc.identifier.citedreferenceBachmann, R., R. J. Caballero, and E. M. Engel ( 2013 ): “ Aggregate Implications of Lumpy Investment: New Evidence and a Dsge Model,” American Economic Journal: Macroeconomics, 5 ( 4 ), 29 – 67.
dc.identifier.citedreferenceBaley, I., and A. Blanco ( 2019 ): “ Firm Uncertainty Cycles and the Propagation of Nominal Shocks,” AEJ: Macro, 11 ( 1 ), 276 – 337.
dc.identifier.citedreferenceBaley, I., and A. Blanco ( 2021 ): “ Supplement to ‘Aggregate Dynamics in Lumpy Economies’,” Econometrica Supplemental Material, 89, https://doi.org/10.3982/ECTA17344.
dc.identifier.citedreferenceBertola, G., and R. J. Caballero ( 1994 ): “ Irreversibility and Aggregate Investment,” The Review of Economic Studies, 61 ( 2 ), 223 – 246.
dc.identifier.citedreferenceBlanco, A. ( 2020 ): “ Optimal Inflation Target in an Economy With Menu Costs and a Zero Lower Bound,” American Economic Journal: Macroeconomics.
dc.identifier.citedreferenceBlanco, A., and J. Cravino ( 2020 ): “ Price Rigidities and the Relative PPP,” Journal of Monetary Economics, 116, 104 – 116.
dc.identifier.citedreferenceBorovička, J., L. P. Hansen, and J. A. Scheinkman ( 2014 ): “ Shock Elasticities and Impulse Responses,” Mathematics and Financial Economics, 8 ( 4 ), 333 – 354.
dc.identifier.citedreferenceCaballero, R. J., and E. Engel ( 1991 ): “ Dynamic ( s, s ) Economies,” Econometrica, 59 ( 6 ), 1659 – 1686.
dc.identifier.citedreferenceCaballero, R. J., and E. Engel ( 1999 ): “ Explaining Investment Dynamics in U.S. Manufacturing: A Generalized ( s, s ) Approach,” Econometrica, 67 ( 4 ), 783 – 826.
dc.identifier.citedreferenceCaballero, R. J., and E. M. Engel ( 1993 ): “ Microeconomic Adjustment Hazards and Aggregate Dynamics,” The Quarterly Journal of Economics, 108 ( 2 ), 359 – 383.
dc.identifier.citedreferenceCaballero, R. J., and E. M. Engel ( 2007 ): “ Price Stickiness in Ss Models: New Interpretations of Old Results,” Journal of Monetary Economics, 54, 100 – 121.
dc.identifier.citedreferenceCaballero, R. J., E. Engel, and J. Haltiwanger ( 1995 ): “ Plant‐Level Adjustment and Aggregate Investment Dynamics,” Brookings Papers on Economic Activity, 1–54.
dc.identifier.citedreferenceCaballero, R. J., E. Engel, and J. Haltiwanger ( 1997 ): “ Aggregate Employment Dynamics: Building From Microeconomic Evidence,” The American Economic Review, 87 ( 1 ), 115 – 137.
dc.identifier.citedreferenceCalvo, G. A. ( 1983 ): “ Staggered Prices in a Utility‐Maximizing Framework,” Journal of Monetary Economics, 12 ( 3 ), 383 – 398.
dc.working.doiNOen
dc.owningcollnameInterdisciplinary and Peer-Reviewed


Files in this item

Show simple item record

Remediation of Harmful Language

The University of Michigan Library aims to describe library materials in a way that respects the people and communities who create, use, and are represented in our collections. Report harmful or offensive language in catalog records, finding aids, or elsewhere in our collections anonymously through our metadata feedback form. More information at Remediation of Harmful Language.

Accessibility

If you are unable to use this file in its current format, please select the Contact Us link and we can modify it to make it more accessible to you.