In this sense, we extend the foundational theorem of Hulten (1978) beyond first-order terms. Key features ignored by first-order approximations that play a crucial role are: structural elasticities of substitution, network linkages, structural returns to scale, and the extent of factor reallocation.
Our Hulten’s Theorem To understand B t, let’s study rst the true aggregate permanent income Prop. Our Hulten’s Theorem Aggregate permanent income is invariant to the AD shock t. Instead, it is instead pinned down by technology/capital alone: +X1 k=0 k Z E t [y t+k] = 1 ~ 1 k t Standard Hulten’s thm: static. Here: dynamic
Econometrica 87(4): 1155-1203. Gabaix, X. (2011). The granular origins of aspects (Hulten et al. 2001; Gaber et al. 2005).
Key features ignored by first-order approximations that play a crucial role are: structural microeconomic elasticities of substitution, network linkages, structural microeconomic returns to scale, and the extent of factor reallocation. What is Hulten’s Theorem? In an efficient economy, the macro impact of a shock to industry i depends on i ’s sales as a share of aggregate output, up to a first-order Although Hulten’s theorem is most prominent for its use in growth accounting, where it is employed to measure movements in the economy’s production possibility frontier, it is also the benchmark result in the resurgent literature on the macroeconomic impact of microeconomic shocks in mutisector models and models with production networks.2 of GDP. Hulten’s theorem (Appendix B) motivates the use of sales rather than value added. innovations by Walmart, the difficulties of a Japanese bank, new exports by Boeing, and a strike at General Motors.3 Since modern economies are dominated by large firms, idiosyncratic shocks to these firms can lead to nontrivial aggregate shocks. Intresseanmälan. Vill du veta mer?
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In this sense, we extend the foundational theorem of Hulten (1978) beyond the first order to capture nonlinearities. Key features ignored by first-order approximations that play a crucial role are: structural microeconomic elasticities of substitution, network linkages, structural microeconomic returns to scale, and the extent of factor reallocation.
Some recent studies provide explicit counterexamples to the Hulten theorem. First, it was shown that the theorem does not hold Hulten Theorem IHulten Theorem 1 Introduction The foundations of macroeconomics rely on Domar aggregation: changes in a constant-returns-to-scale index are approximated by a sales-weighted average of the changes in its components. 1 Hulten (1978), building on the work of Solow (1957), provided a rationale Passa på och stoppa ner Cultural Theory i julklappssäcken innan den tar slut. Upptäck även andra julklappar från Bokus.
Limits of Hulten’s Theorem and Need for New Theories Fails in inefficient economies. Fails at higher-orders of approx. relevant for nonlinearities. Disaggregated details and initial aggregation level matter. Need new theories for inefficient and nonlinear aggregation.
26 Apr 2014 Predictive models on data streams differ from standard predictive modeling in several key aspects (Hulten et al. 2001; Gaber et al. 2005). First The macroeconomic impact of microeconomic shocks: Beyond Hulten's theorem. Econometrica 87(4): 1155-1203. Gabaix, X. (2011).
Disaggregated details and initial aggregation level matter. Need new theories for inefficient and nonlinear aggregation. In this sense, we extend the foundational theorem of Hulten (1978) beyond first-order terms. Key features ignored by first-order approximations that play a crucial role are: structural elasticities of substitution, network linkages, structural returns to scale, and the extent of factor reallocation.
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Working paper. Baumol, W.J. (1967) Macroeconomics of unbalanced growth: the anatomy of urban crisis. American Economic Review 57(3): 415-426. Hultens Theorem.
Under some simple
Here we introduce the Binomial and Multinomial Theorems and see how they are The Multinomial Theorem gives us an expansion when the base has more
7. Mirsky's Theorem (Dual to Dilworth's Theorem). A poset of height h can be partitioned into h antichains.
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The Investment Network, Sectoral Comovement, and the Changing U.S. Business Cycle∗ ChristianvomLehn BrighamYoungUniversityandIZA cvomlehn@byu.edu ThomasWinberry
(1978) Theorem, and (vi) generates a “frictional” origin of aggregate 3In Appendix 8, I use Hulten's Theorem to show aggregate volatility depends on the herfindahl of the economy, and the herfindahl of the economy depends on The macroeconomic impact of microeconomic shocks: beyond Hulten's Theorem. DR Baqaee, E Farhi. Econometrica 87 (4), 1155-1203, 2019.