Entry and exit echoes

Boyan Jovanovic, Chung Yi Tse

    Research output: Contribution to journalArticlepeer-review

    Abstract

    While aggregate data do not show the investment echoes predicted by vintage-capital models, echoes arise in rates of entry and exit of firms at the industry level. Moreover, industries where prices decline rapidly experience early 'shakeouts'. The relation emerges naturally in a vintage-capital model in which exit of firms sometimes accompanies the replacement of their capital, and in which a shakeout is the first replacement 'echo' of the capital created when the industry is born.

    Original languageEnglish (US)
    Pages (from-to)514-536
    Number of pages23
    JournalReview of Economic Dynamics
    Volume13
    Issue number3
    DOIs
    StatePublished - Jul 2010

    Keywords

    • Vintage capital

    ASJC Scopus subject areas

    • Economics and Econometrics

    Fingerprint Dive into the research topics of 'Entry and exit echoes'. Together they form a unique fingerprint.

    Cite this