Productivity growth over the business cycle: cleansing effects of recessions

This paper investigates the impact of recent recessions on origins productivity growth. We show how business cycles affect growth, with particular attention for job reallocation and labor hoarding. find evidence that induce enhancing in manufacturing but not services industries hoarding mitigates this cleansing effect recessions. Furthermore, we entry exit firms industry dynamics shape evolution aggregate productivity. During recessions, governments support via temporary unemployment programs to save jobs. A side is low-productive can be distorted, while such effects typically spur As many developed economies struggle a slowdown it important policy makers understand micro growth are aware policies during could long-term