Erzo G. J. Luttmer

Erzo G.J. Luttmer

"Technology Diffusion and Growth," Journal of Economic Theory, 2012, Vol. 147, 602-622.

imperfectly elastic entry is key to robustly ensure existence of a balanced growth path with a stationary firm size distribution
long-run growth emerges even though entrants can only imitate relatively unproductive incumbents
this imitation mechanism produces a unique stationary distribution

"On the Mechanics of Firm Growth," The Review of Economic Studies, 2011, Vol. 78, No. 3, 1042-1068; see also MPLS Fed Region.

a Roy model of entrepreneurship (points out the Frechet special case)
firms grow by accumulating organization capital (e.g. finding new customers)
persistent heterogeneity in mean firm growth rates is needed to account for the relatively young age of very large firms
a subset of new firms "burst on the scene"
small quality differences can lead to large size differences, over time

"Models of Growth and Firm Heterogeneity," Annual Review of Economics, 2010, Vol. 2, 547-576.

a survey that compares and contrasts models of firm size based on productivity growth and capital accumulation

"Selection, Growth, and the Size Distribution of Firms," Quarterly Journal of Economics, 2007, Vol. 122, No. 3, 1103-1144.

an explanation for the joint emergence of Pareto productivity distributions and long-run aggregate growth
a traveling wave of productivities with an endogenously determined shape and speed
firm size differences reflect productivity and market size (consumer preferences)
long-run growth driven by the ability of entrants to (imperfectly) imitate randomly sampled incumbents
that is, ideas generated by incumbent experience flow to potential incumbents
the model has both productivity improvements and gains from variety (but no scale effects)
only one of the continuum of stationary distributions is accessible from an initial distribution with bounded support

"Efficiency and Equilibrium when Preferences are Time-Inconsistent," with Thomas Mariotti, Journal of Economic Theory, 2007, Vol. 132, No. 1, 493-506.
"Competitive Equilibrium When Preferences Change over Time," with Thomas Mariotti, Economic Theory, 2006, Vol. 27, No. 3, pp. 679-690.
"The Existence of Subgame-Perfect Equilibrium in Continuous Games with Almost Perfect Information: A Comment," with Thomas Mariotti, Econometrica, 2003, Vol. 71, No. 6, pp. 1909-1911.
"Subjective Discounting in an Exchange Economy," with Thomas Mariotti, Journal of Political Economy, 2003, Vol. 111, No. 5, pp. 959-989.
"What Level of Fixed Costs Can Reconcile Consumption and Stock Returns?," Journal of Political Economy, 1999, Vol. 107, No. 5, pp. 969-997.
"Short-Term Interest Rates as Subordinated Diffusions," with Timothy G. Conley, Lars Peter Hansen and Jose A. Scheinkman, The Review of Financial Studies, 1997, Vol. 10, No. 3, pp. 525-577.
"Asset Pricing in Economies with Frictions," Econometrica, 1996, Vol. 64, No. 6, pp. 1439-1467.
"Econometric Evaluation of Asset Pricing Models," with Lars Peter Hansen and John Heaton, The Review of Financial Studies, 1995, Vol. 8, No. 2, pp. 237-274.

these slides provide a concise exposition of how growth and heterogeneous productivities emerge
based on my 2007 QJE and 2012 JET papers

in my 2007 QJE paper, I noted a multiplicity of growth rates and stationary distributions
the same problem arises in the Frechet branch of the knowledge diffusion literature
these slides explain which growth rate and stationary distribution will actually emerge

an introduction to my 2007 QJE, 2011 Review of Economic Studies, and 2012 JET papers
with special attention to the mechanism for Zipf's law in my 2011 and 2012 papers

an introduction to my 2007 QJE and 2014 Minneapolis Fed w.p. 715 in the same notation
for simplicity: competitive product markets; see the QJE paper for monopolistic competition and the resulting gains from variety

a summary of research on how to deal with the multiplicity of balanced growth paths in large economies with social learning
knowledge diffuses slowly...

If the intertemporal elasticity of substitution is greater than 1 and the economy is sufficiently productive, then there may not be a finite upper bound on how large the primary deficits of the government can be.

slides presented at the Econometric Society meetings in Los Angeles, June 23, 2023

Repeated discovery of the same ideas is inevitable. In the setting of this paper, this implies that patent-protected monopoly profits should be taxed.

a new way to obtain uniqueness in the context of my 2007 QJE paper on productivity distributions and long-run growth
slides for this paper (October 2021)

an attempt to follow the dictum "what can be said at all can be said clearly"
best way to figure out my 2007 QJE paper, plus some commentary on related literature

combines ideas from my 2012 and 2013 Fed working papers
low consumption and employment when organization capital is destroyed, consumers become more patient, or a bubble bursts
recovery is slow, in part because the firm size distribution is close to Zipf's law
a consumption-sector elasticity of substitution below 1 generates plausible equilibrium trajectories