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Missing growth from creative destruction

Aghion, Philippe, Bergeaud, Antonin, Boppart, Timo, Klenow, Peter J. and Li, Huiyu (2017) Missing growth from creative destruction. CEP Discussion Papers (CEPDP1514). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of “missing growth” for private nonfarm businesses from 1983– 2013. The first approach exploits information on the market share of surviving plants. The second approach applies indirect inference to firm-level data. We find: (i) missing growth from imputation is substantial — at least 0.6 percentage points per year; and (ii) most of the missing growth is due to creative destruction (as opposed to new varieties)

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2017 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 01 Feb 2018 12:34
Last Modified: 17 Sep 2020 23:06
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/86606

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