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Reorganization

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  • Robert E. Hall

Abstract

One of the productive activities engaging the work force is reorganizing. When factors of production are better matched, productivity is higher. The probabilistic matching model of Diamond, Mortensen, and others provides a way to make the idea of reorganization precise. Because the flow of organizational effort generates benefits lasting well into the future, it is appropriate to think of organizational capital. Unemployment-job seeking-is one of the inputs to organization. The flow of organizational effort represented by unemployment is analogous to the flow of physical investment. When an adverse technology shock causes job destruction, the economy substitutes the formation of new organizational capital for the flow of output. An increase in the interest rate can cause intertemporal substitution toward lower job destruction and less reorganization, but this effect may not come into play for a brief unexpected increase, and may be overwhelmed by intertemporal substitution in physical capital.

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  • Robert E. Hall, 1999. "Reorganization," NBER Working Papers 7181, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7181
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    References listed on IDEAS

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    1. Robert E. Hall, 1999. "The Concentration of Job Destruction," NBER Working Papers 7025, National Bureau of Economic Research, Inc.
    2. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, January.
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    1. P. Laplagne & M. Glover & T. Fry, 2005. "The Growth of Labour Hire Employment in Australia," Staff Working Papers 0501, Productivity Commission, Government of Australia.
    2. Ouyang, Min, 2009. "The scarring effect of recessions," Journal of Monetary Economics, Elsevier, vol. 56(2), pages 184-199, March.
    3. William Duncombe & John Yinger, 2001. "Does School Consolidation Cut Costs?," Center for Policy Research Working Papers 33, Center for Policy Research, Maxwell School, Syracuse University.
    4. Domenico J. Marchetti & Francesco Nucci, 2007. "Pricing Behavior and the Response of Hours to Productivity Shocks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(7), pages 1587-1611, October.
    5. Kerschbamer, Rudolf & Tournas, Yanni, 2003. "In-house competition, organizational slack, and the business cycle," European Economic Review, Elsevier, vol. 47(3), pages 505-520, June.
    6. David A. Marshall, 2001. "The crisis of 1998 and the role of the central bank," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 2-23.
    7. Francois, P. & Lloyd-Ellis, H., 2001. "Animal Spirits Meets Creative Destruction," Discussion Paper 2001-36, Tilburg University, Center for Economic Research.
    8. Robert Shimer, 2007. "Mismatch," American Economic Review, American Economic Association, vol. 97(4), pages 1074-1101, September.
    9. Thijs van Rens, 2004. "Organizational capital and employment fluctuations," Economics Working Papers 944, Department of Economics and Business, Universitat Pompeu Fabra.
    10. Esbjerg, Lars & Grunert, Klaus G. & Bech-Larsen, Tino & Juhl, Hans Jørn & Brunsø, Karen, 2005. "MANUFACTURER AND RETAILER BRANDS IN FOOD RETAIL ASSORTMENTS Notes from a shopping trip across Europe," MAPP Working Papers 85, University of Aarhus, Aarhus School of Business, The MAPP Centre.
    11. Mariano Tommasi, 1996. "High inflation: resource misallocations and growth effects," Estudios de Economia, University of Chile, Department of Economics, vol. 23(2 Year 19), pages 157-177, December.
    12. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
    13. Molina Morales, F. Xavier, 2000. "Geographical Embeddedness Of The Firm. A Case Study Based On The Knowledge-Based View," ERSA conference papers ersa00p346, European Regional Science Association.
    14. Jim Malley & Anton Muscatelli & Ulrich Woitek, 1998. "The Interaction Between Business Cycles and Productivity Growth: Evidence from US Industrial Data," Working Papers 9805, Business School - Economics, University of Glasgow, revised Oct 1998.
    15. Wheeler, Christopher H., 2007. "Job Flows And Productivity Dynamics: Evidence From U.S. Manufacturing," Macroeconomic Dynamics, Cambridge University Press, vol. 11(02), pages 175-201, April.
    16. Philippe Aghion & Gilles Saint-Paul, 1998. "Uncovering Some Causal Relationships Between Productivity Growth and the Structure of Economic Fluctuations: A Tentative Survey," LABOUR, CEIS, vol. 12(2), pages 279-303, July.
    17. V A Muscatelli., 1995. "Flexibility, Structural Change and the Global Economy," Working Papers 9601, Business School - Economics, University of Glasgow, revised Jan 1996.
    18. Philippe Aghion & George-Marios Angeletos & Abhijit Banerjee & Kalina Manova, 2005. "Volatility and Growth: Credit Constraints and Productivity-Enhancing Investment," NBER Working Papers 11349, National Bureau of Economic Research, Inc.
    19. Márcio Corrêa & Mário Centeno, 2006. "Technological Progress And Average Job Matching Quality," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 166, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    20. Gadi Barlevy, 2004. "On the timing of innovation in stochastic Schumpeterian growth models," Working Paper Series WP-04-11, Federal Reserve Bank of Chicago.

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