Abstract
This paper discusses the stylized facts, the theory, and the remaining problems of productivity dispersion, which is essentially related to the concept of equilibrium in the neoclassical theory. Empirical study of data relating to Japanese firms shows that they all obey the Pareto law, and also that the Pareto index decreases with the level of aggregation. In order to explain these two stylized facts we propose a theoretical framework built on the basic principle of statistical physics and on the concept of superstatistics, an approach that accommodates fluctuations of aggregate demand. We show that the allocation of production factors depends crucially on the level of aggregate demand, and that the higher the level of aggregate demand, the closer the economy is to the frontier of the production possibility set.
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The authors would like to thank Dr. Y. Ikeda and Dr. W. Souma for various discussions related to the topics discussed in this paper. We also wish to acknowledge the generous support of the Hitachi Research Institute and Hitachi Ltd for a grant towards part of our research, and the Research Institute of Economy, Trade and Industry for supporting Hiroshi Yoshikawa’s work. We are grateful to the Yukawa Institute for Theoretical Physics (YITP) at Kyoto University for allowing us to use their computing facility, and to the participants at the YITP workshop YITP-W-07-16 “Econophysics III Physical approach to social and economic phenomena” for helpful comments while we were completing our investigation.
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Aoyama, H., Yoshikawa, H., Iyetomi, H. et al. Productivity dispersion: facts, theory, and implications. J Econ Interact Coord 5, 27–54 (2010). https://doi.org/10.1007/s11403-010-0063-9
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DOI: https://doi.org/10.1007/s11403-010-0063-9