Crises dampen productivity: IMF paper
The hike in costs that results from financial shocks damages total factor productivity growth, a paper published in January by the International Monetary Fund (IMF) finds.
"Tighter credit conditions have a negative effect on factor productivity, contrary to the basic argument behind the ‘cleansing effect' theories," the authors, Marcello Estevão and Tiago Severo, write. They find that the reduction in output growth that is not a direct result of inputs is not accounted for by increasing returns
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