Sectoral reallocations, real estate shocks, and productivity divergence in Europe

Thomas Grjebine (), Jérôme Héricourt and Fabien Tripier
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Thomas Grjebine: CEPII

Review of World Economics (Weltwirtschaftliches Archiv), 2023, vol. 159, issue 1, No 3, 132 pages

Abstract: Abstract This paper investigates the role of sectoral reallocations in the divergence of productivity in Europe, based on a database for 33 sectors and 14 countries between 1995 and 2015. Using the contribution of sectoral productivity growth to Total Factor Productivity (TFP) dynamics at the country level, we highlight that variations in the relative size of sectors—less productive sectors growing relatively to more productive ones—have been at the origin of variable productivity losses in main European countries. Parallel to this divergence, European countries experienced heterogeneous real estate price dynamics, which took the form, in some economies, of massive boom-bust cycles. We investigate real estate shocks as a potential source of sectoral reallocations through a collateral mechanism. These shocks turn out to be a strong driver of productivity divergence between European countries.

Keywords: Productivity; Sectoral Reallocations; Real Estate Shocks; Collateral (search for similar items in EconPapers)
JEL-codes: E00 F45 R30 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Sectoral reallocations, real estate shocks, and productivity divergence in Europe (2022)
Working Paper: Sectoral reallocations, real estate shocks, and productivity divergence in Europe (2022)
Working Paper: Sectoral reallocations, Real estate shocks, and productivity divergence in Europe (2019)
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DOI: 10.1007/s10290-022-00464-3

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