Equation 14 · Selection Accounting: The Price Equation Runs the Economy
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the same headcount and wildly different. Read the equation part by part below; each part has a contextual explanation and a link to its mathematical background.
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This bears directly on the declining-dynamism debate. U.S. business concentration has risen over the same decades that startup rates and job reallocation have fallen [ 12 ] , and Proposition 4 says that falling mechanically widens the drift band that any measured selection term must clear before it means anything. An economy moving toward the concentrated end of the range above is not only changing its market structure; it is degrading the statistical power of every reallocation decomposition run on the resulting data, exactly when reallocation is the thing everyone most wants to measure precisely.
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