Seminar "Investment in Productivity and the Long-Run Effect of Financial Crises on Output"

Tuesday February 21st, Maarten de Ridder (University of Cambridge) will present "Investment in Productivity and the Long-Run Effect of Financial Crises on Output".

February 21, 2017
CPB-office, Bezuidenhoutseweg 30, The Hague, room 3, Braamzaal

Time: 13.00-14.00 hours
Location: CPB-office, Bezuidenhoutseweg 30, The Hague, room 3, Braamzaal

Presentation: Maarten de Ridder (University of Cambridge)

Discussant: tba

Language: English

Registration:  Please register here

A valid ID card is required for external visitors. Please note that the waiting time at the reception desk can last 5-10 minutes. Guests with a Rijkspas may circumvent the reception desk and directly  go to the seminar room by filling in this form in advance: InterDepartementale Toegang

Abstract subject:
This paper analyzes the channels through which  nancial crises exert long-term negative effects on output. Recent models suggest that a shortfall in productivity-enhancing investments temporarily slows technological progress, creating a gap between pre-crisis trend and actual GDP. This hypothesis is tested using a linked lender-borrower dataset on 519 U.S. corporations responsible for 54% of industrial research and development. Exploiting quasi-experimental variation in firm-level exposure to the 2008-9  nancial crisis, I show that tight credit reduced investments in productivity-enhancement, and has significantly slowed down output growth between 2010 and 2015. A partial-equilibrium aggregation exercise suggests output would be 12% higher today if productivity-enhancing investments had grown at pre-crisis rates.

CPB organises seminars for researchers. During these seminars, academic papers are presented and discussed. Seminars are held on Tuesday from 1.00 pm. to 2.00 pm.

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Bram Wouterse