TY  - JOUR
AU  - Bergoeing,Raphael
AU  - Loayzaw,Norman
AU  - Repetto,Andrea
TI  - Slow Recoveries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10584
PY  - 2004
Y2  - June 2004
UR  - http://www.nber.org/papers/w10584
L1  - http://www.nber.org/papers/w10584.pdf
N1  - Author contact info:
Raphael Bergoeing
Diagonal Paraguay 257 - of. 1505
Santiago
CHILE
E-Mail: rbergoeing@fen.uchile.cl

Andrea Repetto
University of Chile
E-Mail: no email available
AB  - 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 link between aggregate growth and plant dynamics through its 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. We also find that output losses associated to delayed recoveries are large.
ER  -