INFLATION AND ESTABLISHMENT TURNOVER

摘要

Much macroeconomic research is devoted to the study of the relationship between inflation and real variables. Inflation operates through redistributive and price effects (including interest rates and wages) that affect economic decisions. We contribute to the study of this real-nominal link from a novel perspective, by considering the empirical relation between inflation and turnover. We analyze gross employment flows in continuing establishments, new establishments (births) and exiting establishments (deaths). The study of the link between gross employment flows and inflation has not been emphasized in the literature, which has traditionally focused on net employment flows. Our approach allows us to highlight another potential cost of inflation: its negative impact on entry and exit. Entry and exit (turnover) constitute an economic phenomenon that is fundamental to the process of economic change through their influence on productivity and growth.