Implications of Resource Reallocation and Technical Progress for Macroeconomic Fluctuations: Evidence from Plant-Level U.S. Manufacturing Data

contributions to aggregate productivity growth over this period. While reallocation is important for aggregate productivity growth, it contributes little to fluctuations in aggregate productivity growth at business cycle frequencies. Almost all of the volatility in aggregate productivity growth was due to variation in the growth rate of technical efficiency. In contrast, aggregate reallocation is relatively stable and almost always positive, contributing 1 percentage point per year to aggregate productivity growth.