This paper develops a tractable model for the computational and empirical analysis of infinite-horizon oligopoly dynamics. It features aggregate demand uncertainty, sunk entry costs, stochastic idiosyncratic technological progress, and irreversible exit. We develop an algorithm for computing a...

Consumption of households with liquid financial assets responds much more to transitory income shocks than the permanent-income hypothesis predicts. That is, middle class households act as if they face liquidity constraints. This paper addresses this puzzling observation with a model of...

This paper develops an econometric model of firm entry, competition, and exit in dynamic oligopolistic markets. The model entertains market-level demand and cost shocks, sunk entry costs, and parameters that capture economic barriers to entry and the toughness of price competition. Nevertheless...

This paper compares business cycle fluctuations in hours worked by households with substantial capital income and without any capital income. We find that hours worked by households at the 95th percentile of the capital-labor income ratio, or "high-saving hours worked," have a significantly...

This paper studies the entry and exit of U.S. manufacturing plants over the business cycle and compares the results with those from a vintage capital model augmented to reproduce observed features of the plant life cycle. Looking at the entry and exit of plants provides new evidence supporting...

This paper develops a simple and robust implication of free entry followed by competition without substantial strategic interactions: Increasing the number of consumers leaves the distributions of producers' prices and other choices unchanged. In many models featuring non-trivial strategic...

We present a structural model of firm growth, learning, and survival and consider its identification and estimation. In the model, entrepreneurs have private and possibly error-ridden observations of persistent and transitory shocks to profit. We demonstrate that the model's parameters can be...