Economics Research Seminar – Georg Duernecker
The Economics research group welcomes Professor Georg Duernecker.
He will present his work, entitled "Firm Expectations, Innovation and Growth."
About the speaker
Georg Duernecker is Associate Professor of Economics at Goethe University Frankfurt and a CEPR research affiliate. He holds a PhD from the European University Institute and has published in top journals including Review of Economic Studies and Journal of Economic Dynamics and Control. His research focuses on macroeconomics and labour market dynamics.
Research abstract
Using a large and representative panel survey of German firms, we document sizable forecast errors in employment growth, which decline with firm age and correlate with investment and R&D activity.
Motivated by this, we build an endogenous growth model with heterogeneous firms who learn productivity from noisy signals, decide on innovation, hiring, and exit. Aggregate productivity growth responds through two channels: firm selection (via entry/exit) and innovation (via R&D).
We calibrate the model to match realised and expected firm growth rates over their lifecycle and quantify how information frictions impact selection and innovation, ultimately shaping aggregate productivity.