Sectoral reallocations, Real estate shocks, and productivity divergence in Europe
Jérôme Héricourt () and
Fabien Tripier ()
Working Papers from CEPII research center
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) 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 (search for similar items in EconPapers)
JEL-codes: D22 F45 R30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff, nep-opm, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2019-09
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