Fall 2015

- 1.1 Size distribution (Week 1) Lecture Note

Background reading: Sutton, J, “Gibrat's Legacy”

Lucas, R., “The Size Distribution of Business Firms”, Bell Journal

*Axtell, R., “Zipf Distribution of US Firm Sizes”

*Gabaix, X., “Power Laws in Economics and Finance”

*Rossi-Hansburg and Wright, “Establishment Size Dynamics in the Aggregate Economy”, AER


- 1.2 Entry, Exit, and Growth (Week 2-3) Lecture Note

o *Jovanovic, B., “Selection and the Evolution of Industry”, Econometrica, 1982, 649-670

o *Dunne, T., Roberts, M. and Samuelson, L., “The Growth and Failure of U.S. Manufacturing Plants”, QJE, November, 1989

o *Hopenhayn, H., “Entry, Exit, and Firm Dynamics in Long Run Equilibrium”, Econometrica, 1992, 1127-1150

o *Aw., Chung, and Roberts, “Productivity, Output, and Failure: A Comparison of Taiwanese and Korean Manufacturers”, EJ, 2003

o Asplund and Nocke., “Firm Turnover in Imperfectly Competitive Markets,” Review of Economic Studies, 2006 (20 min presentation)

o *Financing Investment, Gomes, AER, 2001

o *Financial Markets and Firm Dynamics, Cooley and Quadrini, AER, 2001

Homework 1 (Due 11/24)

- 1.3 Quality Investment with Endogenous Growth (Week 3) Math Prep  Lecture Note

o Luttmer, E., “Selection, Growth, and the Size Distribution of Firms,” Quarterly Journal of Economics, 2007

o *Klette, T. and Kortum, S., “Innovating Firms and Aggregate Innovation”, JPE, 112 (5), 2004, 986-1018

o *Lentz, R. and Mortensen, D., “An Empirical Model of Growth through Product Innovation”, Econometrica

o Bloom et al, "Innovation, Reallocation, and Growth" (20 min presentation)


- 1.4 Misallocation in Industry Dynamic Models (Week 4)

o *Hsieh and Klenow, "Misallocation and Manufacturing TFP in China and India", QJE, 2009

o *Restuccia and Rogerson, "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, 2008

o *Midrigan and Xu, "Finance and Misallocation: Evidence from Plant-Level Data", 2012

See also reference in http://klenow.com/Misallocation.pdf


- 1.5 Customer Capital (Week 5)

o Arkolakis C., “A Unified Theory of Firm Selection and Growth”, QJE

o Gourio, F. and Redunko, L., “Customer Capital", Review of Economic Studies

o Drozd. L and Nosal, J., “Understanding International Prices: Customer as Capital", AER

o Eaton et al, “A Search and Learning Model of Export Dynamics", WP