Macro Seminar - Stephen Terry (University of Michigan)
16:00 - 17:00 29 September 2026
Abstract: Idiosyncratic shocks shape firm decisions and the value functions they maximize. Using a comprehensive firm-level dataset, we document significant departures from the widely assumed Gaussian AR(1) stochastic process, including fat-tailed, leptokurtic revenue transitions and lower persistence in the tails. This discrepancy has two key...
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