TY - JOUR
T1 - Do Firm-Level Shocks Generate Aggregate Fluctuations? A Cross-Country Analysis
AU - Lin, Shuheng
AU - Pérez, Francisca
N1 - Publisher Copyright:
© 2024 Walter de Gruyter GmbH, Berlin/Boston.
PY - 2025/1/1
Y1 - 2025/1/1
N2 - This paper tests the granular hypothesis introduced by Gabaix (2011. “The Granular Origins of Aggregate Fluctuations.” Econometrica 79 (3): 733–72) in the US, Germany, Canada, France, Japan, and the UK. We find that firm-level idiosyncratic shocks significantly impact aggregate fluctuations in only three of the six countries analyzed. Compared to the US, Japan and Germany, the UK, France, and Canada show greater granularity, but also a negligible firm-level contribution to aggregate volatility. Additional results look at the role of the transportation sector as a potential driver of granular effects in the US, Germany and Japan.
AB - This paper tests the granular hypothesis introduced by Gabaix (2011. “The Granular Origins of Aggregate Fluctuations.” Econometrica 79 (3): 733–72) in the US, Germany, Canada, France, Japan, and the UK. We find that firm-level idiosyncratic shocks significantly impact aggregate fluctuations in only three of the six countries analyzed. Compared to the US, Japan and Germany, the UK, France, and Canada show greater granularity, but also a negligible firm-level contribution to aggregate volatility. Additional results look at the role of the transportation sector as a potential driver of granular effects in the US, Germany and Japan.
KW - aggregate fluctuations
KW - firm size distribution
KW - granular hypothesis
KW - idiosyncratic shocks
UR - https://www.scopus.com/pages/publications/85215325934
U2 - 10.1515/bejm-2024-0017
DO - 10.1515/bejm-2024-0017
M3 - Article
AN - SCOPUS:85215325934
SN - 1935-1690
VL - 25
SP - 45
EP - 79
JO - B.E. Journal of Macroeconomics
JF - B.E. Journal of Macroeconomics
IS - 1
ER -