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Reallocation effects of recessions and financial crises: An industry-level analysis

Coricelli, Fabrizio, Karadimitropoulou, Aikaterini, Leon-Ledesma, Miguel A. (2016) Reallocation effects of recessions and financial crises: An industry-level analysis. The B.E. Journal of Macroeconomics: Contributions, 16 (2). pp. 485-522. ISSN 1935-1690. (doi:10.1515/bejm-2015-0082) (KAR id:53984)

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https://doi.org/10.1515/bejm-2015-0082

Abstract

We characterize the behavior of disaggregate manufacturing sectors for a large set of developed and emerging markets around recession dates. We uncover some relevant stylized facts. The dispersion in value added growth rates in developed economies is counter-cyclical, whereas for emerging countries it is pro-cyclical. Recoveries are more productivity-driven in developed countries as opposed to employment-driven for emerging markets. Around recession episodes sectoral-level misallocation of resources does not significantly change in developed economies, whereas it increases in emerging economies during financial crises. Therefore, there is no evidence that recessions improve the allocation of resources across industries.

Item Type: Article
DOI/Identification number: 10.1515/bejm-2015-0082
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Miguel Leon-Ledesma
Date Deposited: 03 Feb 2016 13:16 UTC
Last Modified: 29 May 2019 16:57 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/53984 (The current URI for this page, for reference purposes)
Leon-Ledesma, Miguel A.: https://orcid.org/http://www.orcid.org/0000-0002-3558-2990
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