December 2025

Monday 8
- 14:15 - 15:45

UFR SEGGAT - MRSH

Université de Caen Normandie

Calvados

Normandie

[Séminaire Caen] Firm Selection, Productivity Distribution and Expectation-Driven Fluctuations

Name: [Séminaire Caen] Firm Selection, Productivity Distribution and Expectation-Driven Fluctuations
Start: 2025-12-08T14:15:00+01:00
End: 2025-12-08T15:45:00+01:00
Location: UFR SEGGAT - MRSH

Présentation de Nicolas ABAD, LERN, Université de Rouen Normandie

Monday 8 December 2025, 14:15

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vincent.merlin@unicaen.fr

CREM

Abstract:
This paper shows how expectation-driven business cycle fluctuations can emerge from firm entry and selection rather than from aggregate externalities. To this end, I consider a standard RBC model with monopolistic competition and heterogeneous firms. The selection effect is driven by a productivity cut-off determined by a zero-profit condition while firm entry is characterized by new firms that are potentially different from incumbents, consistent with empirical evidence. I then characterize the local dynamics of the model and show that local indeterminacy, and therefore expectation-driven fluctuations, depends on a single sufficient statistic that summarizes a feedback loop between aggregate productivity and output. As a result, when new entrants are on average more productive than incumbents, this feedback is strong enough for expectations to generate business cycle fluctuations.

recherche, économie, séminaire

December 2025

Monday 8
- 14:15 - 15:45

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Thématique

Recherche

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Séminaire

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About the location

UFR SEGGAT - MRSH

Université de Caen Normandie

Calvados

Normandie

UID

Licensor: CREM - Centre de Recherche en Économie et Management

Updated on November 27, 2025

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