Publication
Feb 2011
Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. The author presents a New Keynesian model with growth in firm-specific productivity and firm turnover that captures these two phenomena. The model predicts that the optimal rate of long-run inflation is positive and equal to growth in firm-specific productivity.
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English (PDF, 48 pages, 566 KB) |
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Author | Henning Weber |
Series | Kiel Institute Working Papers |
Issue | 1685 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2011 Kiel Institute for the World Economy |