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Value without Employment

Author

Listed:
  • Simcha Barkai
  • Stavros Panageas

Abstract

Young firms' contribution to aggregate employment has been underwhelming. However, a similar trend is not apparent in their contribution to aggregate sales or aggregate stock market capitalization. We study the implications of the arrival of “low marginal - high average” revenue-product-of-labor firms in a stylized model of dynamic firm heterogeneity, and show that the model can account for a large number of facts related to the decline in “business dynamism”. We study the long-term implications of the decline in business dynamism on the economy by providing analytical results that connect the decline in dynamism to the eventual decline of consumption.

Suggested Citation

  • Simcha Barkai & Stavros Panageas, 2021. "Value without Employment," NBER Working Papers 29414, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29414
    Note: AP EFG LS PR
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    File URL: http://www.nber.org/papers/w29414.pdf
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    Cited by:

    1. Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2023. "Antitrust Enforcement Increases Economic Activity," HEC Research Papers Series 1488, HEC Paris.
    2. Barkai, Simcha & Benzell, Seth G., 2024. "70 years of US corporate profits," Journal of Corporate Finance, Elsevier, vol. 87(C).

    More about this item

    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
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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