1. Crucial Issues ............................................... 1
1.1. Introduction ............................................ 1
1.2. Aggregate Among Peers - If You Please ................... 4
1.3. Robinson Crusoe Meets Friday ............................ 5
1.4. Complexity .............................................. 7
1.5. Outline of the Book ..................................... 9
2. Stylized Facts of Industrial Dynamics: The Distribution
of Firms' Size .............................................. 11
2.1. Introduction ........................................... 11
2.2. Pareto, Gibrat, Laplace: The Statistical Analysis
of Industrial Dynamics ................................. 12
2.3. Unconditional Firms' Size Distribution for Pooled
International Data ..................................... 14
2.4. The Size Distribution of Firms Conditional on the
Business Cycle ......................................... 17
2.5. The Size Distribution Shift over the Business Cycle .... 20
2.6. Does it Make any Sense? ................................ 25
2.7. Power Laws' Changes in Slope ........................... 27
2.8. A Mean/Variance Relationship for the Size
Distribution ........................................... 28
3. Stylized Facts in Industrial Dynamics: Exit, Productivity,
Income ...................................................... 33
3.1. The Exit of Firms ...................................... 33
3.1.1. Evidence on the Extinction Rate ................. 33
3.1.2. Power Law for Bad Debt .......................... 38
3.2. Productivity and Income ................................ 40
3.2.1. The Distribution of Productivity in France
and Spain ....................................... 40
3.2.2. Power Law Tails in the Italian Personal
Income Distribution ............................. 43
3.3. Power Law Scaling in the World Income Distribution ..... 50
3.4. Distributional Features of Aggregate Fluctuations ...... 54
4. An Agent-based Model ........................................ 61
4.1. Introduction ........................................... 61
4.2. Heterogeneous Interacting Agents and Power Laws ........ 62
4.3. Agent Based Modeling ................................... 65
4.4. Scale Free Property and Fat Tails Rate of Growth ....... 66
4.5. An Agent-based Model ................................... 74
4.5.1. Firms ........................................... 74
4.5.2. The Banking Sector .............................. 76
4.5.3. Firms' Demography ............................... 78
4.5.4. Long-Run Dynamics ............................... 78
4.6. Simulation Results: Preliminaries ...................... 79
4.6.1. Firms' Size and Growth Rates Distributions ...... 81
4.6.2. Conditional Distributions ....................... 83
4.7. Statistical Aggregation ................................ 85
4.8. Summing Up ............................................. 91
Appendix .................................................... 91
5. Where Do We Go from Here? ................................... 95
5.1. Instead of a Conclusion ................................ 95
5.2. Where Are We? .......................................... 95
5.3. A Hybrid Framework ..................................... 97
5.4. Where Do We Go from Here? ............................. 100
5.1. References ............................................ 105
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