Firm Dynamics and Growth Measurement in France.

Summary Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Philippe Aghion, Antonin Bergeaud, Timo Boppart & Simon Bunel use the theory and methodology developed by Aghion et al. (2017) to quantify in the case of France how much of productivity growth is missed by statistical offices because of this. Using the census of plants in France, they find that from 2004 to 2015, about 0.5 percentage point of real output growth per year is not taken into account, which is about the same as what was found in the U.S. While this result suggests that missing growth from creative destruction could structurally be the same in different countries, the authors show that they in fact hide different underlying establishment and firm's lifecycle dynamics in the two countries.