The Growth Potential of Startups over the Business Cycle

This paper shows that employment in cohorts of US firms is strongly influenced by aggregate conditions at the time of their entry. Employment fluctuations of startups are procyclical, they persist into later years, and cohort-level employment variations are largely driven by differences in firm size, rather than the number of firms. An estimated general equilibrium firm dynamics model reveals that aggregate conditions at birth, rather than post-entry choices, drive the majority of cohort-level employment variation by affecting the share of startups with high growth potential. In the aggregate, changes in startup conditions result in large, slow-moving fluctuations in employment

Reviving american entrepreneurship? tax reform and business dynamism

The 2017 Tax Cuts and Jobs Act slashed tax rates on business income and introduced immediate expensing of investments. Using a quantitative heterogeneous-firms model, we investigate the long-run effects of such tax reforms on firm dynamics. We find that they can substantially increase business dynamism, potentially offsetting the large decline in the U.S. startup rate observed over recent decades. This result is driven by indirect equilibrium forces: the tax reform stimulates firm entry, leading to an increase in labor demand and wages. Related to this is a large boost of the number of firms and of aggregate output, investment and employment

The pre-shock gas of SN1006 from HST/ACS observations

We derive the pre-shock density and scale length along the line of sight for the collisionless shock from a deep HST image that resolves the H alpha filament in SN1006 and updated model calculations. The very deep ACS high-resolution image of the Balmer line filament in the northwest (NW) quadrant shows that 0.25 < n_0 < le$ 0.4 cm-3 and that the scale along the line of sight is about 2 x 10^{18} cm, while bright features within the filament correspond to ripples with radii of curvature less than 1/10 that size. The derived densities are within the broad range of earlier density estimates, and they agree well with the ionization time scale derived from the Chandra X-ray spectrum of a region just behind the optical filament. This provides a test for widely used models of the X-ray emission from SNR shocks. The scale and amplitude of the ripples are consistent with expectations for a shock propagating though interstellar gas with ~ 20% density fluctuations on parsec scales as expected from studies of interstellar turbulence. One bulge in the filament corresponds to a knot of ejecta overtaking the blast wave, however. The interaction results from the rapid deceleration of the blast wave as it encounters an interstellar cloud.Comment: 16 pages, 6 figures, to appear in Ap