Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272871 
Year of Publication: 
2022
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 414
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
We characterize the dispersion of firm-level productivity and demand shocks using Swedish microdata including prices and utilization and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than TFPQ dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneousfirm model matching the micro facts, demand dispersion has unambiguously negative effects on output via a "wait and see" channel. Productivity dispersion does not generate "wait and see" effects, but affects output negatively by inducing markup dispersion.
Subjects: 
demand estimation
productivity
variable markups
business cycles
dispersion
uncertainty
passthrough
adjustment costs
JEL: 
D21
D22
D81
E32
L11
Document Type: 
Working Paper

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