Reallocation effects of recessions and financial crises: an industry-level analysis

Coricelli, Fabrizio, Karadimitropoulou, Aikaterini and Leon-Ledesma, Miguel (2016) Reallocation effects of recessions and financial crises: an industry-level analysis. B.E. Journal of Macroeconomics, 16 (2). 485–522. ISSN 1555-0486

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    We characterize the behavior of disaggregate manufacturing sectors for a large set of developed and emerging markets around recession dates. We uncover some relevant stylized facts. The dispersion in value added (VA) growth rates in developed economies is counter-cyclical, whereas for emerging countries it is pro-cyclical. Recoveries are more productivity-driven in developed countries as opposed to employment-driven for emerging markets. Around recession episodes sectoral-level misallocation of resources does not significantly change in developed economies, whereas it increases in emerging economies during financial crises. Therefore, there is no evidence that recessions improve the allocation of resources across industries.

    Item Type: Article
    Uncontrolled Keywords: permanent productivity effects,recessions,sectoral restructuring
    Faculty \ School: Faculty of Social Sciences > School of Economics
    Depositing User: Pure Connector
    Date Deposited: 22 Mar 2016 09:30
    Last Modified: 09 Feb 2019 01:04
    DOI: 10.1515/bejm-2015-0082

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