This paper estimates a structural model of firm growth and partially sunk investment. In the model, the firm's optimal adjustment keeps the gap between the actual capital stock and its frictionless counterpart between two boundaries. We show that any two quantiles of output growth conditional on...

The question of how technological change affects labor markets is a classical one in macroeconomics. A standard framework for addressing this question is the matching model with vintage capital and exogenous technical progress. Within this framework, it has been argued that the impact of...

We present a simple sticky-price model with inventories and show that the employment response to a productivity shock depends crucially on the extent to which goods are storable. If firms hold inventories, then, in response to a favorable cost shock, firms can expand output relative to sales....