Economics Research Seminar – Professor Georg Duernecker

Title: Firm Expectations, Innovation and Growth

Date: 2 April 2025

Time: 13:30- 14:30

Venue: NUBS.2.03

If you would like to attend, please register using the following link:

Firm Expectations, Innovation and Growth

Speaker:   Professor Georg Duernecker

Georg Duernecker is an Associate Professor of Economics at Goethe-University Frankfurt and a research affiliate at the CEPR. He studied economics at the Vienna University of Economics and at the Institute for Advanced Studies, Vienna, and he received his Ph.D. in Economics from the European University Institute. Prior to joining the Economics Department at Goethe-University Frankfurt he held positions at the University of Mannheim, the Institute for International Economic Studies, Stockholm and the University of Munich. His current research is in the field of macroeconomics and labor market economics. He has published his research in leading academic journals, including the Review of Economic Studies, the Journal of the European Economic Association, the Journal of Development Economics, the Journal of Applied Econometrics, the Journal of Economic Dynamics and Control, and the European Economic Review.

Empirische Wirtschaftsforschung und Internationale Wirtschaftspolitik: Georg Dürnecker

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 which are related to investment and R&D activity. Motivated by this evidence, we build an endogenous growth model with heterogeneous firms which learn their productivity from noisy signals, decide about innovation activity, employment, and exit. Aggregate productivity growth responds to a selection channel via firm entry and exit and to an innovation channel via R&D investments of heterogeneous firms. We calibrate the model to replicate the realised and expected firm growth rates over the firms’ lifecycle in our data. We use the calibrated model to quantify the role of information frictions in the selection and innovation channels behind aggregate productivity growth.