Simon Bunel
- 19 March 2024
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 2, 2024Details
- Abstract
- Recent shocks such as the pandemic and the energy shock triggered by Russia’s unjustified war against Ukraine have interacted with other structural changes, including the green and digital transitions, leading to an uncertain impact on the medium-term productivity prospects of the euro area. This article summarises the key results of recent work on productivity by a group of experts from the European System of Central Banks (ESCB). The analysis builds on previous work undertaken in the context of the ECB monetary policy strategy review.
- JEL Code
- D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
J24 : Labor and Demographic Economics→Demand and Supply of Labor→Human Capital, Skills, Occupational Choice, Labor Productivity
J38 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs→Public Policy
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
O38 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Government Policy
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
Q58 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Government Policy
- 27 February 2024
- OCCASIONAL PAPER SERIES - No. 341Details
- Abstract
- This paper studies the short-term and long-term consequences of the COVID-19 pandemic for productivity in Europe. Aggregate and sectoral evidence is complemented by firm-level data-based findings obtained from a large micro-distributed exercise. Productivity trends during the COVID-19 pandemic differed from past trends. Labour productivity per hour worked temporarily increased, while productivity per employee declined across sectors given the widespread use of job retention schemes. The extensive margin of productivity growth was muted to some degree by the policy support granted to firms. Firm entries declined while firm exits increased much less than during previous crises. The pandemic had a significant impact on the intensive margin of productivity growth and led to a temporary drop in within-firm productivity per employee and increased reallocation. Job reallocation was productivity-enhancing but subdued compared to the Great Recession. As confirmed by a granular data analysis of the distribution of employment subsidies and loan guarantees and moratoria, job reallocation and also debt distribution and“zombie firm” prevalence were not significantly affected by the COVID-19 policy support. The pandemic and related lockdowns accelerated changes in consumer preferences and working habits with potential long-term effects. Generous government support muted the surge in unemployment and reduced permanent scarring effects.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
H25 : Public Economics→Taxation, Subsidies, and Revenue→Business Taxes and Subsidies
J38 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs→Public Policy
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
- 27 February 2024
- OCCASIONAL PAPER SERIES - No. 339Details
- Abstract
- The productivity-enhancing effects of digitalisation have generated increased interest in the promotion of digital technologies. This report provides different estimations for euro area countries of the impact of digital uptake on productivity at firm level, showing that the adoption of digital technologies could lead to an increase in firms’ productivity in the medium term. However, not all firms and sectors experience significant productivity gains from digital adoption, and not all digital technologies deliver significant productivity gains. The report highlights possible factors behind the low productivity benefits of digitalisation in euro area countries. For example, a lack of strong institutions and governance structures may help to explain why digital diffusion is slower than expected, why it is slower in some countries than others and why the expected productivity benefits from digitalisation have not been fully achieved by now. Furthermore, the report suggests that the full benefits of the digital revolution will be reaped by properly supplying skills to firms and also by investing in computerised information in low-productivity firms.
- JEL Code
- D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
J24 : Labor and Demographic Economics→Demand and Supply of Labor→Human Capital, Skills, Occupational Choice, Labor Productivity
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
O38 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Government Policy
C67 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Input?Output Models