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Institutions, Restructuring and Macroeconomic Performance

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  • Ricardo J. Caballero
  • Mohamad L. Hammour

Abstract

A growing body of new research has emphasized the macroeconomic consequences of transactional impediments in factor markets, and their role in the recurrent restructuring requirements of modern economies. We first review the function institutional arrangements play in facilitating transactions and explore the macroeconomic consequences of poor institutions. As an application, we discuss the lessons that can be learnt from observed changes in the nature of unemployment in Europe. We then analyse the effect the institutional environment can have on macroeconomic restructuring. In light of this framework, we revisit the question of the relationship between recessions and restructuring activity, and review the existing evidence of reduced restructuring following recessions. We also discuss corroborating evidence from "merger waves" in the restructuring of corporate assets.

Suggested Citation

  • Ricardo J. Caballero & Mohamad L. Hammour, 2001. "Institutions, Restructuring and Macroeconomic Performance," DELTA Working Papers 2001-03, DELTA (Ecole normale supérieure).
    • Handle: RePEc:del:abcdef:2001-03
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    References listed on IDEAS

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    1. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-248, April.
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    5. Ralph L. Nelson, 1959. "The Merger Movement from 1895 through 1920," NBER Chapters, in: Merger Movements in American Industry, 1895-1956, pages 33-70, National Bureau of Economic Research, Inc.
    6. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
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    More about this item

    Keywords

    MACROECONOMICS ; UNEMPLOYMENT ; MARKET ; MERGERS;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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