Entry Costs and the Macroeconomy

Author/Editor:

Germán Gutiérrez ; Callum Jones ; Thomas Philippon

Publication Date:

November 1, 2019

Electronic Access:

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Summary:

We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by showing that the model-implied entry shocks correlate with independently constructed measures of entry regulations and M&As. We conclude that entry costs have risen in the U.S. over the past 20 years and have depressed capital and consumption by about seven percent.

Series:

Working Paper No. 19/233

Subject:

English

Publication Date:

November 1, 2019

ISBN/ISSN:

9781513512945/1018-5941

Stock No:

WPIEA2019233

Format:

Paper

Pages:

43

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