2019-03-15 · Therefore, even if Hulten’s Theorem does hold, the topology of the network describing relationships between suppliers and customers does play an important role. Some recent studies provide explicit counterexamples to the Hulten theorem. First, it was shown that the theorem does not hold when frictions (e.g. firms entry/exit) are present .

The macroeconomic impact of microeconomic shocks: beyond Hulten's Theorem. DR Baqaee, E Farhi. Econometrica 87 (4), 1155-1203, 2019. 205, 2019.

In this sense, the paper extends the foundational theorem of Hulten (1978) beyond first-order terms to capture nonlinearities. Key features ignored by first-order approximations that play a crucial role are: structural elasticities of substitution, network linkages, structural returns to scale, and the degree to which factors can be reallocated. In this sense, we extend the foundational theorem of Hulten (1978) beyond the first order to capture nonlinearities. Key features ignored by first‐order approximations that play a crucial role are: structural microeconomic elasticities of substitution, network linkages, structural microeconomic returns to scale, and the extent of factor reallocation. Hulten’s theorem provides an inaccurate approximation: unit elasticity (Cobb-Douglas) is a bad assumption for oil? Oil is used as an inelastic (think Leontief) input in all industries.

Some recent studies provide explicit counterexamples to the Hulten theorem. First, it was shown that the theorem does not hold when frictions (e.g. firms entry/exit) are present . Limits of Hulten’s Theorem and Need for New Theories Fails in inefﬁcient economies.

26 Apr 2014 Predictive models on data streams differ from standard predictive modeling in several key aspects (Hulten et al. 2001; Gaber et al. 2005).

Domar aggregation is an approach to aggregating growth measures associated with industries to make larger sector or national aggregate growth rates. The issue comes up in the context of national accounts and multifactor productivity (MFP) statistics.. The objective is to construct the growth rate of an aggregate MFP residual, a sector or national total, as a weighted average of the growth

13 Feb 2020 This post applies a basic framework that is grounded in economic theory to provide a back-of-the envelope calculation of how the “737 MAX Theorem 1: A necessary condition for the imperfect proxy variable to reduce OVB is that sign(rMP|Z) In C. Hulten, V. Ramey (Eds.),. Implications for Future U.S. Production theory: accounting for firm heterogeneity and technical change. Giovanni Baily, M. N., Hulten, C. and Campbell, D. (1992). Productivity dynamics in j.

ing research in game theory, which, alas, as the celebrated Folk theorem indic- slowdown debate, as e.g. by Hulten, Robertson and Wykoff(1987), and by.

Theorem 1.1 (Hulten) Let l i denote industry i’s sales as a share of output, then dlogC dlogAi = l i: Economist Charles Hulten developed this theory more formally in a model of a closed economy. Hulten (1978) used "observed expenditure shares" as weights, and in that model "the first-order impact on output of a TFP shock to a firm or an industry is equal to that industry or firm’s sales as a share of output." Hulten's framing became standard. What is Hulten’s Theorem? Though mathematically true, the result sounds somewhat unintuitive: Shutting down electricity or the transportation system can have impacts above and beyond each industry’s sales as a share of GDP. Turns out the theorem’s quantiﬁers actually matter!

We also show how microeconomic … uence from Hulten’s theorem 2.stickier industries I These are where the ine ciencies are largest 3.more upstream industries I Those have the most impact on other rms (recall prices propagate from a supplier to its customer) 4.industries with less sticky upstreams suppliers and stickier downstream customers I Less sticky suppliers ! own price We are not allowed to display external PDFs yet. You will be redirected to the full text document in the repository in a few seconds, if not click here.click here. The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten's Theorem. David Baqaee and Emmanuel Farhi. Working Paper from Harvard University OpenScholar.
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Productivity Dynamics in. Manufacturing Plants.

Although Hulten’s theorem is most prominent for its use in growth accounting, where it is used to measure movements in the economy’s production possibility frontier, it is also the benchmark result in the resurgent literature on the macroeconomic impact of microeconomic shocks in multisector models and models with production networks, where it is used to make counterfactual predictions.
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The foundational theorem of Hulten (1978) states that for e cient economies and under minimal assumptions, the rst-order impact on output of a TFP shock to a rm or an industry is equal to that industry or rm's sales as a share of output.

Using the weighted standard deviation of productivity 8 Oct 2017 Let's take a look at an example of a mathematical theorem to see whether Platonism the midnight-oil in her lonely attic, finds some very complex geometrical theorem (say, Marco van Hulten on October 8, 2017 at 4 12 Jun 2017 “The Macroeconomic Impact of Microeconomic · Shocks: Beyond Hulten's Theorem.” Carvalho, Vasco and Xavier Gabaix. 2013.