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Sales and markup dispersion: theory and empirics

Abstract:

We derive exact conditions relating the distributions of firm productivity, sales, output, and markups to the form of demand; in particular, for a large family (including Pareto, log-normal, and Frechet), the distributions of productivity and output are the same if and only if demand is \CREMR" (Constant Revenue Elasticity of Marginal Revenue). We then use the Kullback-Leibler Divergence to quantify the information loss when a predicted distribution fails to match the actual one; and we find ...

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Publication status:
Published

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Authors


Mrazova, M More by this author
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Department:
Merton College
Parenti, M More by this author
Publisher:
Centre for Economic Policy Research Publisher's website
Publication date:
2017-05-14
Pubs id:
pubs:700814
URN:
uri:86de31e9-0ddc-41c6-8607-c1f149ec773a
UUID:
uuid:86de31e9-0ddc-41c6-8607-c1f149ec773a
Local pid:
pubs:700814

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