On the irreconcilability of Pareto and Gibrat laws
نویسنده
چکیده
If business firms face a multiplicative growth process in which their growth rates are independent from their sizes, then these sizes cannot be distributed according to a stationary Pareto distribution. At the same time , the Laplace distribution of growth rates cannot be easily reconciled with a Pareto distribution of firm sizes. Recent contributions, using formal arguments, seems to contrast these statements. We prove that the proposed formal results are wrong.
منابع مشابه
The exponential age distribution and the Pareto firm size distribution
Recent work drawing on data for large and small firms has shown a Pareto distribution of firm size. We mix a Gibrat-type growth process among incumbents with an exponential distribution of firm’s age, to obtain the empirical Pareto distribution. JEL codes: L20, L25
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