Luis Garicano 🇪🇺🇺🇦 @lugaricano@respublicae.eu

@VinPons @lemondefr @Cercle_eco @CageJulia @pierrecboyer Congratulations!!

🐦🔗: https://n.respublicae.eu/lugaricano/status/1661003040831287300

@COdendahl GNI?

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660766872214667264

RT @PitchfordRohan: Only wealthy nations have an ultra-privileged class who think negative growth is a good idea.

It’s an idiotic policy that would create mass unemployment, starvation, poverty & malnutrition throughout the world. https://t.co/hXvvwb0BDs

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660741841992536094

Happy to see published this innovative work on the importance of coordination costs inside firms and their implications for adaptation to shocks.
Congratulations @kuhnmo , Jinfeng, @XinchengQiu , and Iourii!
RT @kuhnmo: Great to see
"Coordinated firm-level work processes and macroeconomic resilience"
w Jinfeng Luo, @XinchengQiu & Iourii Manovskii in print at JME.
With four coauthors, it was a coordination effort to get the paper published so let me have a short…

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660736543345070103

@Reformismo21 Muchas gracias @reformismo21!

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660735649010294784

Important analysis by @zoebcullen and Pakzad-Hurson: Pay transparency lowers wages.

Why? if one worker gets a higher wage, employers may have to raise others' wages to others, so they refuse the demand.

Think in equilibrium!
https://onlinelibrary.wiley.com/doi/10.3982/ECTA19788

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660735236697739280

RT @MickiewiczTomek: A v. interesting thread on the microeconomics of the firm, sources of productivity and size of the firm.

A punchline from Lucas: the carriers of all technology knowledge are people. https://t.co/MUZ91WVUZI

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660639313275527169

RT @ProfDiegoPuga: Fantastic thread by @lugaricano on the research on the organisation of firms spanning from Lucas (1978), including subsequent work by Rosen, himself with @HansbergRossi, and many others. https://t.co/xqzePn6QjW

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660638373151662083

@NunezFeijoo @Reformismo21 Muchas gracias por la confianza @NunezFeijoo. Trabajaré desde la fundación, desde la independencia y el rigor para elaborar las mejores propuestas posibles de reforma. Debemos revertir el declive en el que está sumida España

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660628429832609792

And this is it for my brief summary of the "Assignment view of the firm," which was born out of Lucas' and, as Atalay, @aliHortacsu and @chadSyverson have argued, has the potential to explain other important equilibrium patterns about firms. 25/25

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458961856806912

In a trademark Lucas' phrase the paper says

"a distinctive feature of the model is that all knowledge in the economy is held by the individual people who comprise it: there is no abstract technology hovering above them in the ether".

24/25

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458959549915138

Lucas himself would come back, at the end of his career. to these problems.
In 2019 he built a dynamic version of the model that @hansbergrossi and I had developed to study careers in firms. This is one of his last published pieces.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458957016641538

Yes. The basic Lucas style model predicts
- Concavity of wage in size in the cross section
- Linearity of wage in size in the time series
This is what we see in the time series and in the cross section.
22/25

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458954952933391

Does a marriage of talent with size explain the evolution of the size to wage relation, as well as the cross-sectional evidence on CEO pay?

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458952851701761

.@xgabaix and @augustinlandier take Lucas' theory in a different direction. They calibrate it to study whether recent changes in CEO Pay may be related, as the model predicts, to firm size changes.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458950163144704

Hence unlike in all previous literature, there is a one to one "marriage" between workers and managers.
Our framework allows us to have predictions on communication technology (makes organizations larger, deeper, deskills workers), and IT(shorter organizations, empowers workers.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458947629686787

Workers benefit from having good managers (they solve more problems and make their own time more productive), and managers benefit from having good workers (they need less help and allow managers to have a larger team).

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458944807022593

Rosen argues that it is necessary to introduce true complementarities between worker and manager talent.
@HansbergRossi and I do that in our QJE (2006) paper

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458942168813568

Hence talent of workers matters, and hierarchies have many layers.
But Rosen takes a short cut. Workers and managers are linear substitutes in "efficiency units" (talent is proportional).

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458939618664449

So now we have in firms something like the superstar markets:
- Equilibrium assignment of more talented people to top control positions in largest firms
- Multiplicative productivity interactions mean distribution of control and income more skewed than the talent distribution.

🐦🔗: https://n.respublicae.eu/lugaricano/status/1660458937307611136