Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79845
Authors: 
Offick, Sven
Winkler, Roland
Year of Publication: 
2013
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Business Cycles II B02-V1
Abstract: 
This paper explores and quantifies the role of endogenous firm entry in amplifying and propagating shocks to the economy. To this end, we estimate two DSGE models on US data with Bayesian methods: one model with endogenous firm entry and translog preferences and one model without. Both models perform equally well in fitting the data but in doing so the endogenous entry model does not rely on a fairly flexible supply of labor. The presence of firm entry amplifies the effects of productivity and wage mark-up shocks, but it dampens those of aggregate demand and investment-specific technology shocks.
JEL: 
E20
E32
C11
Document Type: 
Conference Paper

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