Seminar Nonlinear Firm Dynamics Macroeconomics Seminar Add to calendar 2022-12-07 11:00 2022-12-07 12:15 Europe/Rome Nonlinear Firm Dynamics Seminar Room 3rd Floor Villa La Fonte YYYY-MM-DD Print Share on Facebook Share on X Share on LinkedIn Send by email When 07 December 2022 11:00 - 12:15 CET Where Seminar Room 3rd Floor Villa La Fonte Organised by Department of Economics In this seminar, Silvia Sarpietro (Bologna University), will present the paper: "Nonlinear Firm Dynamics." This paper presents new evidence on the nature of idiosyncratic shocks to firms and shows why it matters for firm behavior and aggregate fluctuations. We document that firm-level sales and productivity are hit by heavy-tailed shocks and follow a nonlinear stochastic process: firm dynamics depart from the canonical linear AR(1) process and feature substantial heterogeneity by firm size. In addition, our empirical findings suggest that firms can absorb, to a certain extent, some of the unusual fluctuations in fundamentals. We estimate a state-of-the-art semi-structural model to flexibly capture the rich dynamics uncovered in the data and characterize the drivers of nonlinear persistence and non-gaussian shocks. Our model results suggest that accounting for nonlinearities and non-gaussianity can change the role of idiosyncratic (granular) shocks for aggregate fluctuations.Co-author: Davide Melcangi (Federal Reserve Bank of New York)Participation on site will be allowed on a first-come, first-served basis. Speaker(s): Professor Silvia Sarpietro (Bologna University) Contact(s): Cecile Marie Brière (EUI - Department of Economics) Scientific Organiser(s): Prof. Jesus Bueren (EUI - Department of Economics)