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| Identificativo | BeeEspaTamborini02, |
| Tipo di record |  |
| No |
| Autore/i | Bee M ; Espa G ; Tamborini R |
| Anno | 2002 |
| Titolo | Firms' bankruptcy and turnover in a macroeconomy |
| Paper |
| Pubblicazione ospite (in) |
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| Altre Informazioni | presentato al Workshop on Economics and Hetereogeneous Interacting Agents, Abdus Salam International Centre for Theoretical Physics (ICTP), Trieste (Italy) 30 May - 1 June 2002 |
| Keywords separare key1:key2 | |
| Abstract | We have studied a model of a macro-economy in sequential time where the population of firms at each point in time is characterized by a uniform distribution of individual unobservable beliefs about the mechanism relating an observable market signal (the rate of increase of outside money) and the future price level of output. As a consequence of heterogeneous beliefs, a certain share of the population of firms can go bankrupt and is driven out the market in each time period. The bankruptcy mechanism is such that the probability for a firm to fail depends on the parameters of the population's beliefs and its own expected price relative to average. We have shown that within consistent ranges of parameters, non-zero bankruptcies obtain. The rate of bankruptcies in a given period results to be related to economically palusible effects of the parameters of the population beliefs, but not to the rate of money growth by itself (no money illusion).Though markets are in equilibrium for incumbent firms' and workers' exchanges, bankruptcies alter equilibrium properties substantially. Finally we have extended our analyis to the turnover of firms along the sequence of periods. Though successful firms are predominant in each period and the bankruptcy rate tends to shrink, we have found by numerical methods that the probability of bankruptcy converges towards a non-degenerate limit value. In other words, in the long run the economy displays a "structural" or "natural" rate of bankruptcy such that all the previous properties described above hold. |
| File documento allegato |  |
| Unità di ricerca interessata | Dipartimento di economia |
| Documento del gruppo di ricerca | Si |
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