Time：12:00-13:00, Nov. 9th, 2019 Saturday

Venue：Tongji Building Block A Room 510

Speaker：Mario Silva Assistant Professor of Tongji SEM

Abstract:

I examine the role of exogenous disturbances to demand, technology (both total-factor and investment-specific), entry costs, and the obsolescence rate on productivity and other macroeconomic series in a setting in which household consumption variety depends on the number of producers and time spent shopping. Variable capital utilization depends positively on technology and negatively on the capital-labor ratio, as in a real business cycle model, but also on a weighted average of shopping time and the number of producers scaled by the taste of diversity. I estimate the model by Bayesian means on output, consumption, labor supply, and total factor productivity. Positive shocks to preferences and total factor productivity both raise consumption variety, the utilization rate, and the Solow residual; the rise in variety is driven by firm entry in the former and more shopping in the latter. Though total factor productivity shocks remain the most important driver of variation in output, investment, and the Solow residual, preference shocks explain most of consumption, shopping time, and labor, and about a quarter of output. Investment-specific technology shocks explain a major fraction of investment and the utilization rate and a fifth of the Solow residual. Entry cost shocks are an important driver of firm entry and explain about a quarter of labor supply. Disturbances to shopping disutility and the destruction rate are mostly irrelevant.