Dispersion over the business cycle: Passthrough, productivity, and demand

Arbeitspapier

We characterize the dispersion of firm-level productivity and demand shocks using Swedish microdata including prices and utilization and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than TFPQ dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneousfirm model matching the micro facts, demand dispersion has unambiguously negative effects on output via a "wait and see" channel. Productivity dispersion does not generate "wait and see" effects, but affects output negatively by inducing markup dispersion.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Sveriges Riksbank Working Paper Series ; No. 414

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Firm Behavior: Empirical Analysis ; Criteria for Decision-Making under Risk and Uncertainty ; Business Fluctuations; Cycles ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Subject: demand estimation ; productivity ; variable markups ; business cycles ; dispersion ; uncertainty ; passthrough ; adjustment costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carlsson, Mikael ; Clymo, Alex ; Joslin, Knut-Eric
• Event: Veröffentlichung
• (who): Sveriges Riksbank
• (where): Stockholm
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/272871
• Last update: 10.03.2025, 11:43 AM CET