Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/301978 
Year of Publication: 
2024
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 438
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
We study the role of heterogeneity in the revenues of individual firms for euro area macroeconomic dynamics. To this end, we specify two models: a standard aggregate vector autoregressive model (VAR) and an "heterogeneous VAR" (HVAR). The VAR model includes only aggregate data, while the HVAR model also incorporates the feedback loop between firms' revenue distribution and aggregate variables. Our results demonstrate that the behavior of firms' revenue distribution plays a significant role in explaining the dynamics of key euro area macroeconomic variables.
Subjects: 
Firm-level revenues
Functional Vector Autoregressions
Heterogeneous Agent Models
Business Cycle fluctuations
JEL: 
C11
C32
C52
C54
E22
E32
Document Type: 
Working Paper

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