Reallocation in the Great Recession: Cleansing or Not?

Lucia Foster, Cheryl Grim and John Haltiwanger

No 20427, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The high pace of reallocation across producers is pervasive in the U.S. economy. Evidence shows this high pace of reallocation is closely linked to productivity. While these patterns hold on average, the extent to which the reallocation dynamics in recessions are "cleansing" is an open question. We find downturns prior to the Great Recession are periods of accelerated reallocation even more productivity enhancing than reallocation in normal times. In the Great Recession, we find the intensity of reallocation fell rather than rose and the reallocation that did occur was less productivity enhancing than in prior recessions.

JEL-codes: E24 E32 J63 O4 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-hme and nep-mac
Note: EFG LS PR
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Citations: View citations in EconPapers (64)

Published as Reallocation in the Great Recession: Cleansing or Not? , Lucia Foster, Cheryl Grim, John Haltiwanger. in Labor Markets in the Aftermath of the Great Recession , Card and Mas. 2016
Published as Lucia Foster & Cheryl Grim & John Haltiwanger, 2016. "Reallocation in the Great Recession: Cleansing or Not?," Journal of Labor Economics, vol 34(S1), pages S293-S331.

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Related works:
Journal Article: Reallocation in the Great Recession: Cleansing or Not? (2016)
Chapter: Reallocation in the Great Recession: Cleansing or Not? (2013)
Working Paper: REALLOCATION IN THE GREAT RECESSION: CLEANSING OR NOT? (2013)
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