Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/89425 
Year of Publication: 
2005
Series/Report no.: 
LEM Working Paper Series No. 2005/03
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
This paper studies how the interplay between technological shocks and financial variables shapes the properties of macroeconomic dynamics. Most of the existing literature has based the analysis of aggregate macroeconomic regularities on the representative agent hypothesis (RAH). However, recent empirical research on longitudinal micro data sets has revealed a picture of business cycles and growth dynamics that is very far from the homogeneous one postulated in models based on the RAH. In this work, we make a preliminary step in bridging this empirical evidence with theoretical explanations. We propose an agent-based model with heterogeneous firms, which interact in an economy characterized by financial-market imperfections and costly adoption of new technologies. Monte-Carlo simulations show that the model is able jointly to replicate a wide range of stylised facts characterizing both macroeconomic time-series (e.g. output and investment) and firms' microeconomic dynamics (e.g. size, growth, and productivity).
Subjects: 
Financial Market Imperfections
Business Fluctuations
Economic Growth
Firm Size
Firm Growth
Productivity Growth
Agent-Based Models
JEL: 
E32
G30
L11
O40
Document Type: 
Working Paper

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