Aggregate Uncertainty and Sectoral Productivity Growth: The Role of Credit Constraints
Aug 2016 · International Monetary Fund
Ebook
43
Pages
reportRatings and reviews aren’t verified Learn More
About this ebook
We show that an increase in aggregate uncertainty—measured by stock market volatility—reduces productivity growth more in industries that depend heavily on external finance. This effect is larger during recessions, when financing constraints are more likely to be binding, than during expansions. Our statistical method—a difference-in-difference approach using productivity growth for 25 industries for 18 advanced economies over the period 1985-2010—mitigates concerns with omitted variable bias and reverse causality. The results are robust to the inclusion of other sources of interaction effects, such as financial development (Rajan and Zingales, 1998) and counter-cyclical fiscal policy (Aghion et al., 2014). The results also hold if economic policy uncertainty (Baker et al., 2015) is used instead of stock market volatility as the measure of aggregate uncertainty.
Rate this ebook
Tell us what you think.
Reading information
Smartphones and tablets
Install the Google Play Books app for Android and iPad/iPhone. It syncs automatically with your account and allows you to read online or offline wherever you are.
Laptops and computers
You can listen to audiobooks purchased on Google Play using your computer's web browser.
eReaders and other devices
To read on e-ink devices like Kobo eReaders, you'll need to download a file and transfer it to your device. Follow the detailed Help Center instructions to transfer the files to supported eReaders.
