Declining Business Dynamism: What We Know and the Way Forward

Decker, Ryan A.; Haltiwanger, John; Jarmin, Ron S.; Miranda, Javier

doi:10.1257/aer.p20161050

Cited by 178 publications

(107 citation statements)

References 13 publications

(18 reference statements)

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“…He interpreted such a situation as a symptom of structural deficiency of demand mirrored by the excess savings in corporate sector (Summers, 2014). Empirical research confirmed that the aging population (Gagnon et al, 2016) and declining business dynamism (Decker et al, 2016) have been lowering the rate of economic growth after the Great Recession.…”

Section: Discussionmentioning

confidence: 99%

The evolving impact of labour markets on monetary policy

Sławiński¹,

Hausner

2018

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Objectives: The aim of this paper is to address the cycle from monetary policy becoming the main instrument of macroeconomic stabilisation to the current unexpected decline in its effectiveness. Research Design and Methods:This article analyses how preventing the risk of wage-price spirals unwinding became the main task of central banks. Such a perception of monetary policy role was a natural consequence of the Great Inflation of the 1970s and the substantial costs of disinflation of the 1980s. Then this paper highlights the causes behind the recent unexpected emergence of persistently low inflation. Among the most important causes of this were structural changes which took place also in labour markets, being the outcome of the twilight of traditional manufacturing and increasing globalisation. Findings:The structural weakening of the bargaining position labour creates situation in which the period when monetary policy was focused on preventing wage-price spirals has ended. If advanced economies are entering a long period of low inflation and low interest rates, it will necessitate a reformulation of the role that central banks play in stabilisation policies.Recommendation: This paper postulates that central banks should acquire a pivotal role in the macroprudential policy. The main argument is that the independence of central banks, which they obtained when fighting inflation, would increase the effectiveness of the macro-prudential policy.Contribution: Usually success in lowering and stabilising inflation is attributed mainly to the changes in the way in which central banks have been conducting their monetary policy since the early 1980s. This article highlights the fact that the role which was played in this process by the substantial weakening of the labour bargaining position is still underappreciated.

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Section: Discussionmentioning

confidence: 99%

The evolving impact of labour markets on monetary policy

Sławiński¹,

Hausner

2018

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“…3 Both exit and entry rates are on a slight downward trend over the sample, which might be related to an overall decline in business dynamism as documented in Pugsley and Sahin (2014) and Decker et al (2016). The long-run importance of the decline in export business dynamism remains an open question that we leave for future research.…”

Section: Regression Evidencementioning

confidence: 95%

The Great Recession and a Missing Generation of Exporters

Lincoln

McCallum

Siemer

2017

FEDS

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The collapse of international trade surrounding the Great Recession has garnered significant attention. This paper studies firm entry and exit in foreign markets and their role in the post-recession recovery of U.S. exports using confidential microdata from the U.S. Census Bureau. We find that incumbent exporters account for the vast majority of the decline in export volumes during the crisis. The recession also induced a missing generation of exporters, with large increases in exits and a substantial decline in entries into foreign markets. New exporters during these years tended to have larger export volumes, however, compensating for the decline in the number of exporting firms. Thus, while entry and exit were important for determining the variety of U.S. goods that were exported, they were less important for the trajectory of aggregate foreign sales.JEL: F10, F40, E32, E44, J2

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“…As stressed by several studies, most notably Decker, et al (2014Decker, et al ( , 2016a, there has been a notable decline in U.S. business creation that predates the Great Recession. More recent papers have studied some of the macroeconomic ramifications of the slowdown in business entry.…”

Section: Financial Regulation and Business Formationmentioning

confidence: 99%

The Impact of the Dodd-Frank Act on Small Business

Bordo

Duca

2018

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Declining Business Dynamism: What We Know and the Way Forward

Cited by 178 publications

References 13 publications

The evolving impact of labour markets on monetary policy

The evolving impact of labour markets on monetary policy

The Great Recession and a Missing Generation of Exporters

The Impact of the Dodd-Frank Act on Small Business

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