Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)

Abstract: We characterize the dispersion of firm-level productivity and demand shocks using Swedish microdata including prices and utilization and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than TFPQ dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneousfirm model matching the micro facts, demand dispersion has unambiguously negative effects on output via a “wait and see” channel. Productivity dispersion does not generate “wait and see” effects, but affects output negatively by inducing markup dispersion.

Keywords: demand estimation; productivity; variable markups; business cycles; dispersion; uncertainty; passthrough; adjustment costs

JEL-codes: D21; D22; D81; E32; L11

Language: English

122 pages, May 1, 2022

Full text files

no.-414-dispersion-o...ivity-and-demand.pdf  Full text

Download statistics

• Sveriges Riksbank (Central Bank of Sweden)
• Ordering Working Papers
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Lena Löfgren ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:13:28.