Missing Growth from Creative Destruction

P. Aghion, Antonin Bergeaud, Timo Boppart, Pete Klenow and Huiyu Li

Abstract: Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of “missing growth” for private nonfarm businesses from 1983–2013. The first approach exploits information on the market share of surviving plants. The second approach applies indirect inference to firmlevel data. We find: (i) missing growth from imputation is substantial — at least 0.6 percentage points per year; and (ii) most of the missing growth is due to creative destruction (as opposed to new varieties).

Keywords: Growth; Price measurement; Firm dynamics. (search for similar items in EconPapers)
JEL-codes: O4 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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