Journal of Monetary Economics 2019 DOI: 10.1016/j.jmoneco.2018.08.008 View full text
Thorsten Drautzburg

Abstract: New businesses are important for job creation and have contributed more than proportionally to the expansion in the 1990s and the decline of employment after the 2007 recession. This paper provides a framework for analyzing determinants of business creation in a world where new business owners are exposed to idiosyncratic risk due to initial imperfect diversification. This paper uses this framework to analyze how entrepreneurial risk has changed over time and how this has affected employment in the US. Conditi…

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