On the cost of financial crises
Financial crises are costly. In the recent crisis in Argentina, for example, from the onset of sovereign debt repayment difficulties at the end of 2000 until the beginning of 2002, real GDP dropped by almost 20%. A simple aggregate growth accounting exercise suggests that a large part of this decline is related to a fall in total factor productivity. What could cause such a large decline in aggregate productivity? Using a unique dataset that tracks the experiences of individual manufacturing establishments in Argentina during the financial crisis at an annual frequency, this paper examines the hypothesis that the collapse in the Argentine financial sector led to a decline in the efficiency of the resource allocation mechanism. We document that declines in factor utilization levels only explain a portion of the decrease in total factor productivity, and that there is evidence that the efficiency of resource allocation deteriorated. We conclude by quantifying the extent to which this decline in allocative efficiency explains the decline in aggregate output and productivity.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2008|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:red:sed008:180. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.