Missing growth from creative destruction

Aghion, Philippe ORCID: 0000-0002-9019-1677, Bergeaud, Antonin, Boppart, Timo, Klenow, Peter J. and Li, Huiyu (2017) Missing growth from creative destruction. CEP Discussion Papers (CEPDP1514). London School of Economics and Political Science. Centre for Economic Performance, 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
Date Deposited:	01 Feb 2018 12:34
Last Modified:	11 Dec 2024 19:26
Funders:	Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/86606

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