Davis, Leilade Souza, Joao2024-04-262021-03-06202110.7275/21977170https://hdl.handle.net/20.500.14394/22288This paper establishes that entry and exit regulate the top half of the profitability distribution in the post-1970 U.S. economy. We, first, document stability in the distribution of total profits earned on tangible, intangible, and financial capital. Whereas a narrower measure of returns on tangible capital, instead, suggests rising dispersion, it fails to capture post-1970 growth in intangible and financial assets. Second, we use quantile decompositions to show that churning – specifically, exit for cause – regulates median and top-end profitability. Thus, the process by which competition drives out unprofitable firms acts to stabilize profit rates in the U.S. economy.UMass Amherst Open Access PolicyProfit ratescompetitionentry and exit dynamicsWorking Paper