See this paper [0] bu Gabaix for instance: > This paper proposes that idiosyncratic firm-level shocks can explain an important part of aggregate movements and

See this paper [0] bu Gabaix for instance: > This paper proposes that idiosyncratic firm-level shocks can explain an important part of aggregate movements and provide a microfoundation for aggregate shocks. > Existing research has focused on using aggregate shocks to explain business cycles, arguing that individual firm shocks average out in the aggregate. I show that this argument breaks down if the distribution of firm sizes is fat-tailed, as documented empirically. > The idiosyncratic movements of the largest 100 firms in the United States appear to explain about one-third of variations in output growth. [0] http://pages.stern.nyu.edu/~xgabaix/papers/granular.pdf http://pages.stern.nyu.edu/~xgabaix/papers/granular.pdf