Uncertainty and sectoral shifts: The Interaction between firm-level and aggregate-level shocks, and macroeconomic activity
Journal Article (Journal Article)
This study predicts and finds that the interaction of firm-level and aggregatelevel shocks explains a significant portion of shocks to macroeconomic activity. Specifically, we hypothesize that the relation between uncertainty and economic growth is most pronounced when both firm-level and aggregate-level uncertainty are high simultaneously. Similarly, we hypothesize that aggregate performance affects unemployment most when both firm-level dispersion is high and aggregate performance is low, based on the sectoral shift theory. Our hypotheses and empirical results show that the interactive effect of firm-level and aggregate-level shocks are larger than the sum of the individual effects.
Full Text
Duke Authors
Cited Authors
- Kalay, A; Nallareddy, S; Sadka, G
Published Date
- January 1, 2018
Published In
Volume / Issue
- 64 / 1
Start / End Page
- 198 - 214
Electronic International Standard Serial Number (EISSN)
- 1526-5501
International Standard Serial Number (ISSN)
- 0025-1909
Digital Object Identifier (DOI)
- 10.1287/mnsc.2016.2581
Citation Source
- Scopus