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Reallocation and Learning Over the Business Cycle

Author

Listed:
  • Schivardi, F.

Abstract

I show how cyclical aggregate shocks can stimulate structural reallocation activities, which in turn amplify the effect of the shock. I emphasize the informational aspects related to restructuring activities and their potential interplay with aggregate shocks. Building on work by Caplin and Leahy (1994), I develop a model in which production units are uncertain about the value of staying in the market and learn about it over time in a Bayesian fashion. In addition to their own private assessment, they can also learn from observing other units' decisions.

Suggested Citation

  • Schivardi, F., 1998. "Reallocation and Learning Over the Business Cycle," Papers 345, Banca Italia - Servizio di Studi.
    • Handle: RePEc:fth:banita:345
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    Cited by:

    1. Schivardi, Fabiano & Torrini, Roberto, 2008. "Identifying the effects of firing restrictions through size-contingent differences in regulation," Labour Economics, Elsevier, vol. 15(3), pages 482-511, June.
    2. John Haltiwanger & Steven J. Davis, 1999. "On the Driving Forces behind Cyclical Movements in Employment and Job Reallocation," American Economic Review, American Economic Association, vol. 89(5), pages 1234-1258, December.
    3. Luca Pieroni & Fabrizio Pompei, 2005. "Innovations and Labour Market Institutions: An Empirical Analysis of the Italian Case in the middle 90’s," Quaderni del Dipartimento di Economia, Finanza e Statistica 12/2005, Università di Perugia, Dipartimento Economia.
    4. Siviero, S. & Terlizzese, D. & Visco, I., 1999. "Are Model-Based Inflation Forecasts Used in Monetary Policymaking? A Case Study," Papers 357, Banca Italia - Servizio di Studi.
    5. Matthew Doyle, 2010. "Informational externalities, strategic delay, and optimal investment subsidies," Canadian Journal of Economics, Canadian Economics Association, vol. 43(3), pages 941-966, August.
    6. Schmoch, Ulrich, 2007. "Double-boom cycles and the comeback of science-push and market-pull," Research Policy, Elsevier, vol. 36(7), pages 1000-1015, September.
    7. Luca Pieroni & Fabrizio Pompei, 2008. "Evaluating innovation and labour market relationships: the case of Italy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(2), pages 325-347, March.
    8. Schivardi, Fabiano, 2003. "Reallocation and learning over the business cycle," European Economic Review, Elsevier, vol. 47(1), pages 95-111, February.
    9. Matthew Doyle, 2010. "Informational externalities, strategic delay, and optimal investment subsidies," Canadian Journal of Economics, Canadian Economics Association, vol. 43(3), pages 941-966, August.
    10. Guiso, Luigi & Schivardi, Fabiano, 1999. "Information Spillover and Factor Adjustment," CEPR Discussion Papers 2289, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

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    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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