Micro and Macro Data Integration: The Case of Capital

Abstract

1.A related argument is that recent evidence suggests that micro investment is a highly nonlinear function of fundamentals. Prima facie evidence for this is that investment at the micro level is highly skewed to the right and has a mass around zero and a fat right tail. It is unlikely that the distribution of shocks affecting businesses has this same shape (indeed, measures of the distribution of shocks at the micro level suggest that the distribution is approximately normal). The nonlinear nature of micro investment behavior implies that the response of aggregate investment dynamics to aggregate shocks will be complex and depend upon the crosssectional distribution of the circumstances faced across firms (see, e.g., Caballero, Engel, and Haltiwanger 1995). Viewed from this perspective, micro/macro consistency is fundamentally important for understanding the aggregate response of the economy to aggregate shocks. 548Becker, Haltiwanger, Jarmin, Klimek, and Wilson 4. The deterioration of the ASM in terms of capital measurement is unfortunate, as the expenditures and retirements/sales data have been used at the micro level successfully to analyze the capital adjustment processes across businesses (see, e.g., Caballero, Engel, andHaltiwanger 1995 andHaltiwanger 2000). The type of analysis in these studies is no longer feasible.5. See Doms, Jarmin, and Klimek (2004) for more detailed descriptions of the investment data and sampling units in the AES. 6. A pilot version of ACES was in the field prior to 1993. 554Becker, Haltiwanger, Jarmin, Klimek, and Wilson 12. Unfortunately, the version of the FRTW that makes use of the 1997 CFT was not released in time for use in our study.

Who Creates Jobs? Small versus Large versus Young

“…We follow the approach adopted for the BDS and based on our prior work (see Becker et al, 2006, andDavis et al, 2007). The firm identifiers in the LBD are not explicitly longitudinal.…”

Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings

“…The analysis is performed separately for building capital and machinery capital. This procedure is described further by Becker et al (2005), Chiang (2004), and Davis, Haltiwanger, and Schuh (1996), from whose files we gratefully obtained deflators.…”

Production Function Estimation with Measurement Error in Inputs

“…Of course, these approaches are related since the book value of capital is typically the outcome of firms themselves applying the PIM in their internal accounting. PIM is the most common approach to construct capital stock series; see Becker and Haltiwanger (2006) for an excellent overview.…”

“…Census data on manufacturing, such as the Annual Survey of Manufacturing and the Census of Manufacturers, these perpetual inventory and direct assets measures differ by 15 to 20 percent (see Becker and Haltiwanger (2006)). This suggests a reasonable amount of measurement error in capital that is likely to be persistent over time.…”

“…However, this also implies that changes in capital, which is, by definition, equal to investment minus depreciation, is heavily contaminated by measurement error. Indeed, in an in-depth study of measurement issues related to capital, Becker and Haltiwanger (2006) find that different ways of measuring capital that ought to be equivalent, such as using perpetual inventory methods or inferring capital investment from the capital producing sectors, lead to different results for a variety of outcomes, such as parameter estimates of the production function, and the investment and capital patterns.…”