Slow Recoveries

Raphael Bergoeing (), Norman Loayzaw and Andrea Repetto

No 10584, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Economies respond differently to aggregate shocks that reduce output. While some countries rapidly recover their pre-crisis trend, others stagnate. Recent studies provide empirical support for a link between aggregate growth and plant dynamics through its effect on productivity: the entry and exit of firms and the reallocation of resources from less to more efficient firms explain a relevant part of transitional productivity dynamics. In this paper we use a stochastic general equilibrium model with heterogeneous firms to study the effect on aggregate short-run growth of policies that distort the process of birth, growth and death of firms, as well as the reallocation of resources across economic units. Our findings show that indeed policies that alter plant dynamics can explain slow recoveries. We also find that output losses associated to delayed recoveries are large.

JEL-codes: D21 D24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-ent
Date: 2004-06
Note: EFG PR
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Related works:
Working Paper: Slow Recoveries (2004)
Working Paper: Slow recoveries (2004)
Working Paper: Slow Recoveries (2004)
Journal Article: Slow recoveries (2004)
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