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Slow recoveries

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  • Raphael Bergoeing; Loayza
  • Norman; Repetto

Abstract

Economies respond differently to aggregate shocks that reduce output. While some countries rapidly recover their pre-crisis trend, others stagnate. Recent studies provide empirical support for a connection between aggregate growth and plant dynamics through their effect on productivity: the entry and exit of firms and the reallocation of resources from less to more efficient firms explain a relevant part of transitional productivity dynamics. In this paper we use a stochastic general equilibrium model with heterogeneous firms to study the effect on aggregate short-run growth of policies that distort the process of birth, growth and death of firms, as well as the reallocation of resources across economic units. Our findings show that indeed, policies that alter plant dynamics can explain slow recoveries. Associated output losses are large

Suggested Citation

  • Raphael Bergoeing; Loayza & Norman; Repetto, 2004. "Slow recoveries," Econometric Society 2004 Latin American Meetings 36, Econometric Society.
  • Handle: RePEc:ecm:latm04:36
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    Cited by:

    1. Raphael Bergoeing & Norman V. Loayza & Facundo Piguillem, 2016. "The Whole is Greater than the Sum of Its Parts: Complementary Reforms to Address Microeconomic Distortions," World Bank Economic Review, World Bank Group, vol. 30(2), pages 268-305.
    2. Diego Restuccia, 2008. "The Latin American Development Problem," Working Papers tecipa-318, University of Toronto, Department of Economics.
    3. Raphael Bergoeing Vela & Andrés Hernando & Andrea Repetto, 2010. "Market Reforms and Efficiency Gains in Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 37(2 Year 20), pages 217-242, December.
    4. Mary Hallward-Driemeier & Bob Rijkers, 2013. "Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1788-1810, December.
    5. Maria Bas & Ivan Ledezma, 2008. "Trade integration and within-plant productivity evolution in Chile," PSE Working Papers halshs-00588309, HAL.
    6. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
    7. Luisa Natali & Bruno Martorano & Sudhanshu Handa & Goran Holmqvist & Yekaterina Chzhen, 2014. "Trends in Child Well-being in EU Countries during the Great Recession: A cross-country comparative perspective," Papers inwopa730, Innocenti Working Papers.
    8. Fabio Schiantarelli, 2005. "Product Market Regulation and Macroeconomic Performance: A Review of Cross Country Evidence," Boston College Working Papers in Economics 623, Boston College Department of Economics, revised 04 Aug 2008.
    9. Raphael Bergoeing & Andrea Repetto, 2006. "Micro Efficiency and Aggregate Growth in Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 169-192.
    10. Juan Blyde & Christian Daude & Eduardo Fernández-Arias, 2010. "Output collapses and productivity destruction," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 359-387, June.
    11. Raphael Bergoeing & Norman V. Loayza & Facundo Piguillem, 2011. "The Aggregate and Complementary Impact of Micro Distortions," 2011 Meeting Papers 1426, Society for Economic Dynamics.
    12. Lucas Navarro & Raimundo Soto, 2006. "Procyclical Productivity in Manufacturing," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 193-220.
    13. Alexandre Janiak, 2008. "Mobility in Europe - Why it is low, the bottlenecks, and the policy solutions," European Economy - Economic Papers 2008 - 2015 340, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. Loayza, Norman, 2011. "Volatilidad y crisis: Tres lecciones para países en desarrollo," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 22, pages 9-20.
    15. Loayza, Norman V. & Oviedo, Ana Maria & Serven, Luis, 2005. "Regulation and macroeconomic performance," Policy Research Working Paper Series 3469, The World Bank.
    16. Olaberria, Eduardo & Rigolini, Jamele, 2009. "Managing East Asia's macroeconomic volatility," Policy Research Working Paper Series 4989, The World Bank.
    17. Diego Restuccia, 2013. "The Latin American Development Problem: An Interpretation," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Spring 20), pages 69-108, January.
    18. Popov, Alexander, 2014. "Credit constraints, equity market liberalization, and growth rate asymmetry," Journal of Development Economics, Elsevier, vol. 107(C), pages 202-214.
    19. Maria Bas & Ivan Ledezma, 2008. "Trade integration and within-plant productivity evolution in Chile," Working Papers halshs-00588309, HAL.
    20. Bruno Rocha, 2010. "At Different Speeds: Policy Complementarities and the Recovery from the Asian Crisis," Working Papers id:3294, eSocialSciences.

    More about this item

    Keywords

    productivity growth; plant dynamics; policy; general equilibrium.;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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