From productivity dispersion to three moments

Synthetic English narration.

Change one parameter
Compare two saved economies. We change sigma, keeping zeta, potential firms, and the underlying shocks the same.

The same fourteen firms
These fourteen firms belong to one illustrated market. Keep their identities fixed. Increasing sigma spreads their productivities farther apart.

Firms respond in equilibrium
The model solves market shares and markups, then applies its exit rule. These lower bars show final sales shares. Zero means inactive. The bars describe this market; they are not economy-wide weights.

Aggregate ten thousand markets
Across all ten thousand markets, wages and output adjust with firm decisions. In this saved comparison, output rises, wages rise, and fewer firms remain active. These economy-wide numbers come from the full saved solution.

Read the three moments
The solution gives three estimation moments. In this comparison, employment reallocation rises, the sales-weighted markup rises, and the sales-weighted overhead cost share falls.

What enters each moment
Reallocation uses employment in both periods. Markup and overhead use first-period sales weights. The overhead moment averages firm cost ratios, not economy-wide cost totals.