New goods and the size distribution of firms

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New goods and the size distribution of firms
Erzo Gerrit Jan Luttmer
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Last edited by MARC Bot
December 19, 2020 | History

New goods and the size distribution of firms

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This paper describes a simple model of aggregate and firm growth based on the introduction of new goods. An incumbent firm can combine labor with blueprints for goods it already produces to develop new blueprints. Every worker in the economy is also a potential entrepreneur who can design a new blueprint from scratch and set up a new firm. The implied firm size distribution closely matches the fat tail observed in the data when the marginal entrepreneur is far out in the tail of the entrepreneurial skill distribution. The model produces a variance of firm growth that declines with size. But the decline is more rapid than suggested by the evidence. The model also predicts a new-firm entry rate equal to only 2.5% per annum, instead of the observed rate of 10% in U.S. data.

Publish Date
Language
English

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Edition Availability
Cover of: New goods and the size distribution of firms
New goods and the size distribution of firms
2007, Federal Reserve Bank of Minneapolis, Research Dept.
Electronic resource in English

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Book Details


Edition Notes

Title from PDF file (viewed on June 22, 2007).

"January 2007."

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.

Published in
[Minneapolis, MN]
Series
Working paper / Federal Reserve Bank of Minneapolis, Research Dept -- 649

Classifications

Library of Congress
HB1

The Physical Object

Format
Electronic resource

ID Numbers

Open Library
OL16362409M
LCCN
2007618514

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Download catalog record: RDF / JSON
December 19, 2020 Edited by MARC Bot import existing book
December 10, 2009 Created by WorkBot add works page