Economics at your fingertips  

Productivity growth, capital reallocation and the financial crisis: Evidence from Europe and the US

Carol Corrado, Jonathan Haskel () and Cecilia Jona-Lasinio ()

Journal of Macroeconomics, 2019, vol. 61, issue C, -

Abstract: How has capital reallocation affected productivity growth since the financial crisis? For example, have low interest rates disrupted the reallocation process? This paper calculates the effect on productivity growth of capital reallocation between industries. It uses an accounting framework, due to Jorgenson and his co-authors, that computes the contribution of capital services to productivity growth relative to one where rates of return are equalised between sectors: if capital persists in the low return sectors, the reallocation measure falls. Using data from 11 countries (the major EU economies plus the US), in 1997–2013, we find: (a) the contribution of capital reallocation to productivity growth is lower in most economies after than before the financial crisis, notably in Mediterranean countries; (b) more capital reallocation is correlated with lower real interest rates, contrary to the hypothesis that low real interest rates have hurt capital reallocation; (c) controlling for shocks, lower capital reallocation is associated with lower optimism, and weaker financial systems.

Keywords: Productivity growth; Capital reallocation; Intangible capital (search for similar items in EconPapers)
JEL-codes: O47 E22 E01 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Productivity Growth, Capital Reallocation and the Financial Crisis: Evidence from Europe and the US (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jmacro.2019.04.006

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

Page updated 2021-04-23
Handle: RePEc:eee:jmacro:v:61:y:2019:i:c:12