Missing Growth from Creative Destruction

Item Type Journal paper
Abstract For exiting products, statistical agencies often impute inflation from surviving products. This understates growth if creatively-destroyed products improve more than surviving ones. If so, then the market share of surviving products should systematically shrink. Using entering and exiting establishments to proxy for creative destruction, we estimate missing growth in US Census data on non-farm businesses from 1983 to 2013. We find missing growth (i) equaled about one-half a percentage point per year; (ii) arose mostly from hotels and restaurants rather than manufacturing; and (iii) did not accelerate much after 2005, and therefore does not explain the sharp slowdown in growth since then.
Authors Aghion, Philippe; Bergeau, Antonin; Boppart, Timo; Klenow, Peter & Li, Huiyu
Journal or Publication Title American Economic Review
Language English
Subjects economics
HSG Classification contribution to scientific community
HSG Profile Area None
Refereed Yes
Date 2019
Publisher American Economic Assoc.
Volume 109
Number 8
Page Range 2795-2822
ISSN 0002-8282
Publisher DOI https://doi.org/10.1257/aer.20171745
Depositing User Prof. PhD Timo Boppart
Date Deposited 04 Dec 2020 14:00
Last Modified 20 Jul 2022 17:43
URI: https://www.alexandria.unisg.ch/publications/261581

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Aghion, Philippe; Bergeau, Antonin; Boppart, Timo; Klenow, Peter & Li, Huiyu (2019) Missing Growth from Creative Destruction. American Economic Review, 109 (8). 2795-2822. ISSN 0002-8282

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https://www.alexandria.unisg.ch/id/eprint/261581
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