Who Creates New Firms When Local Opportunities Arise?

A growing theoretical and empirical literature shows that new business formation is key to understanding how economies respond to economic shocks. For example, new firms generate the majority of jobs created in response to fluctuations in local demand or following oil and gas discoveries.

The magnitude of the firm entry…

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Does Economic Insecurity Affect Employee Innovation?

How does employee productivity respond to large shocks to household wealth? Over the past several decades, the annual proportion of households in the U.S. experiencing a severe economic loss has been steadily increasing, peaking with the recent financial crisis. The impact of household wealth shocks on consumption, savings, and retirement…

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