Existing empirical evidence suggests that output is more variable than consumption so that production smoothing is not apparently present. In this paper, we investigate some macroeconomic implications of the proposition that the empirical evidence reflects the presence of some firms in the economy that produce with nonconvex technologies.
Macroeconomic Implications of Production Bunching: Factor Demand LinkagesRussell Cooper and John C. Haltiwanger ,
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Journal of Monetary Economics