Missing Growth from Creative Destruction
Journal
American Economic Review
ISSN
0002-8282
Type
journal article
Date Issued
2019
Author(s)
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.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
None
Refereed
Yes
Publisher
American Economic Assoc.
Volume
109
Number
8
Start page
2795
End page
2822
Subject(s)
Division(s)
Eprints ID
261581
File(s)![Thumbnail Image]()
Name
ABBK 1.pdf
Size
418.19 KB
Format
Adobe PDF
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