The Impact of Credit Booms and Economic Policy on Labour Productivity: A Sectoral Analysis

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F18%3A10241167" target="_blank" >RIV/61989100:27510/18:10241167 - isvavai.cz</a>

Result on the web

<a href="https://www.vsfs.cz/periodika/acta-2018-1.pdf" target="_blank" >https://www.vsfs.cz/periodika/acta-2018-1.pdf</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

The Impact of Credit Booms and Economic Policy on Labour Productivity: A Sectoral Analysis

Original language description

Recent empirical evidence suggests that during economic booms, factors of production (especially labour) may shift into less productive and more pro-cyclical sectors of the economy, which can subsequently deepen and prolong economic slump. In this paper, we explore the eff ects of credit booms, monetary and fi scal policy expansions on labour productivity and labour reallocation in the Czech Republic. We model the eff ects jointly, as they are not mutually exclusive. To this purpose, we build a large dataset of hundreds of economic variables and estimate a FAVAR model of the Czech economy. We produce several fi ndings: (i) a credit boom causes labour reallocation towards less productive sectors; (ii) the eff ects are amplifi ed by a subsequent crisis period; (iii) monetary expansion supports the catch-up eff ect of the Czech economy but at the same time may boost credit activity and indirectly cause misallocations; and (iv) the most pro-cyclical sectors in terms of labour productivity in the Czech economy are Mining and quarrying, Construction and Manufacturing. These fi ndings contribute to the debate illustrating the prolonged decline in the economy and can be further used as an information base for the better targeting of preventive and stabilising economic policy measures in the future.

Czech name

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Czech description

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Type

J_ost - Miscellaneous article in a specialist periodical

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

<a href="/en/project/GA16-13784S" target="_blank" >GA16-13784S: Financial sector policy and institutions: Current challenges in balancing financial development and stability</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

ACTA VŠFS

ISSN

1802-792X

e-ISSN

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Volume of the periodical

12

Issue of the periodical within the volume

1

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

33

Pages from-to

10-42

UT code for WoS article

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EID of the result in the Scopus database

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