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Basile Grassi

By this expert

Large Firm Dynamics and the Business Cycle

Paper Working paper | By Vasco M. Carvalho and Basile Grassi | Apr 2015

Do large firm dynamics drive the business cycle? We answer this question by developing a quantitative theory of aggregate fluctuations caused by firm-level disturbances alone. We show that a standard heterogeneous firm dynamics setup already contains in it a theory of the business cycle, without appealing to aggregate shocks.