Calendrier du 24 juin 2019
Régulation et Environnement
Du 24/06/2019 de 12:00 à 13:00
salle R1-13, campus Jourdan - 75014 Paris
PARENTI Mathieu (PSE & INRAE)
Sales and Markup Dispersion: Theory and Empirics
écrit avec Monika Mrazova and J. Peter Neary
We characterize the analytic relationship between the distributions of two variables linked by a structural model. We then highlight four theoretical applications to models of heterogeneous firms in monopolistic competition. First, we ask which demand func- tions are consistent with productivity and sales distributions having the same form (whether Pareto, lognormal, or Fr ?echet) in the cross section. The answer is a new “CREMR” demand function (Constant Revenue Elasticity of Marginal Revenue). Sec- ond, we show that CREMR is also necessary and sufficient for Gibrat’s Law to hold over time. Third, we use our methodology to quantify misallocation at the microeco- nomic level (both in general and in the special CREMR case). Fourth, we characterize the distribution of markups implied by any assumptions on demand and productivity. Finally, we show in an empirical application using Indian firm-level data on sales and markups that CREMR-based distributions yield a parsimonious fit superior to many widely-used alternatives.