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The granular economy of Kazakhstan

Author

Listed:
  • Jozef Konings

    (Nazarbayev University, Graduate School of Business)

  • Galiya Sagyndykova

    (Nazarbayev University, Department of Economics)

  • Venkat Subramanian

    (Nazarbayev University, Graduate School of Business)

  • Astrid Volckaert

    (KU Leuven, Faculteit Economie en Bedrijfswetenschappen, Vlaams Instituut voor Economie en Samenleving (VIVES))

Abstract

This paper analyzes the importance of idiosyncratic firm specific shocks for explaining macroeconomic fluctuations in an emerging economy. To this end, we use detailed quarterly firm level data to document that the firm size distribution is fat-tailed and that idiosyncratic shocks of the largest 30 firms appear to explain nearly 80% of the growth in aggregate total factor productivity. This confirms earlier research for the U.S. of the "granular hypothesis" (Gabaix, 2011). Thus individual firm shocks do not average out in the aggregate as is assumed in most of the macroeconomic literature, instead, macroeconomic questions can be answered by analyzing the behavior of the largest firms.

Suggested Citation

  • Jozef Konings & Galiya Sagyndykova & Venkat Subramanian & Astrid Volckaert, 2021. "The granular economy of Kazakhstan," Working Papers 2021/01, Nazarbayev University, Graduate School of Business.
    • Handle: RePEc:asx:nugsbw:2021-01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    granularity; firm heterogeneity; aggregate fluctuations; Total Factor Productivity; transitional economies;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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