Asymmetry Reversals and the Business Cycle

Abstract

The cross-sectional dynamics of the U.S. business cycle is examined through the lens of quantile regression models. Conditioning the quantiles of …rm-level growth to di¤erent measures of technological change highlights a deep connection between counter-cyclical skewness and the transmission of aggregate disturbances. Asymmetry reversals emerge as the dominant source of cyclical variation in the probability density, generating a powerful ampli…cation of aggregate shocks to …rm technology. Designing and validating heterogeneous …rm business cycle models should necessarily account for this empirical …nding.JEL classi…cation: C21; E32.

Size, Age and the Growth of Firms: New Evidence from Quantile Regressions

“…However, this is computationally demanding, even in the presece of a limited number of covariates. In Distante, Petrella, and Santoro (2013) we show that quantile estimates are robust to the exclusion of …rm-speci…c e¤ects. We compare Powell's panel estimates with those from a quantile regression with pooled data, concluding that alternative assumptions about the error structure are of second order importance.…”

“…6 Along with being symmetric around zero and bounded between -2 (exit) and 2 (entry), this growth rate represents a second order approximation of the log-di¤erence for growth rates. 7 Distante, Petrella, and Santoro (2013) focus on the business cycle properties of the distribution of …rm growth, highlighting a number of interesting regularities.…”