Debunking the granular origins of aggregate fluctuations: from real business cycles back to Keynes

In this work we study the granular origins of business cycles and their possible underlying drivers. As shown by gabaix (econometrica 79:733–772, 2011), the skewed nature of firm size distributions implies that idiosyncratic (and independent) firm-level shocks may account for a significant portion of aggregate volatility. Yet, we question the original view grounded on “supply granularity”, as proxied by productivity growth shocks – in line with the real business cycle framework–, and we provide empirical evidence of a “demand granularity”, based on investment growth shocks instead. The role of demand in explaining aggregate fluctuations is further corroborated by means of a macroeconomic agent-based model of the “schumpeter meeting keynes” family dosi et al. (j econ dyn control 52:166–189, 2015). Indeed, the investigation of the possible microfoundation of rbc has led us to the identification of a sort of microfounded keynesian multiplier.