scholarly journals Sectoral Productivity Growth, COVID-19 Shocks, and Infrastructure

2021 ◽  
Author(s):  
Hildegart Ahumada ◽  
Eduardo A. Cavallo ◽  
Santos Espina-Mairal ◽  
Fernando Navajas
Keyword(s):  
Latin America ◽  
Labor Productivity ◽  
Historical Data ◽  
Productivity Shocks ◽  
Productivity Losses ◽  
Long Run ◽  
Sectoral Productivity ◽  
The Caribbean ◽  
Panel Vector Autoregression ◽  
Productivity Gains

This paper examines sectoral productivity shocks of the COVID-19 pandemic, their aggregate impact, and the possible compensatory effects of improving productivity in infrastructure-related sectors. We employ the KLEMS annual dataset for a group of OECD and Latin America and the Caribbean countries, complemented with high-frequency data for 2020. First, we estimate a panel vector autoregression of growth rates in sector level labor productivity to specify the nature and size of sectoral shocks using the historical data. We then run impulse-response simulations of one standard deviation shocks in the sectors that were most affected by COVID 19. We estimate that the pandemic cut economy-wide labor productivity by 4.9 percent in Latin America, and by 3.5 percent for the entire sample. Finally, by modeling the long-run relationship between productivity shocks in the sectors most affected by COVID 19, we find that large productivity improvements in infrastructure--equivalent to at least three times the historical rates of productivity gains--may be needed to fully compensate for the negative productivity losses traceable to COVID 19.

Research Insights: Can Better Infrastructure Offset the Negative Impacts That COVID-19 Has Had on Productivity in Different Economic Sectors?

2021 ◽  
Author(s):  
Hildegart Ahumada ◽  
Eduardo A. Cavallo ◽  
Santos Espina-Mairal ◽  
Fernando Navajas
Keyword(s):  
Latin America ◽  
Labor Productivity ◽  
Economic Sectors ◽  
Social Distancing ◽  
Productivity Losses ◽  
Negative Impacts ◽  
Indirect Impacts

The effects of COVID-19 have been stronger in service-related subsectors, where supply and/or demand were constrained by lockdowns and social distancing measures. The losses in these subsectors have had direct impacts-through their weight in countries GDP-and indirect impacts through their effect on other sectors. In Latin America, effects on the three most affected sectors-wholesale, retail, and hospitality services; construction; and manufacturing-add up to a 4.9 percent hit to economy-wide labor productivity through direct and indirect channels. Large productivity improvements in infrastructure may be needed to fully compensate for the negative productivity losses traceable to COVID-19.

Spotlight: 21st Century Skills in Latin America and the Caribbean

2021 ◽  
Author(s):  
Christopher Petrie ◽  
Clara García-Millán ◽  
María Mercedes Mateo-Berganza Díaz
Keyword(s):  
Latin America ◽  
21St Century ◽  
21St Century Skills ◽  
Economic Conditions ◽  
Development Bank ◽  
Learning Context ◽  
Long Run ◽  
The World ◽  
The Caribbean ◽  
Insight Into

There is a wealth of conversation around the world today on the future of the workplace and the skills required for children to thrive in that future. Without certain core abilities, even extreme knowledge or job-specific skills will not be worth much in the long run. To address these issues, the Inter-American Development Bank (IDB) and HundrED conducted this Spotlight project with the goal of identifying and researching leading innovations that focus on 21st Century Skills in Latin America and the Caribbean. The Spotlight program was supported by J.P. Morgan. The purpose of this project is to shine a spotlight, and make globally visible, leading education innovations from Latin America and the Caribbean doing exceptional work on developing 21st Century Skills for all students, teachers, and leaders in schools today. The main aims of this Spotlight are to: Discover the leading innovations cultivating 21st century skills in students globally; understand how schools or organizations can implement these innovations; gain insight into any required social or economic conditions for these innovations to be effectively introduced into a learning context; celebrate and broadcast these innovations to help them spread to new countries. All the findings of the Spotlight in 21st Century Skills are included in this report.

scholarly journals Fiscal Adjustment in Latin America and the Caribbean: Short-Run Pain, Long-Run Gain?

2018 ◽  
Author(s):  
Carlos A. Vegh ◽  
Guillermo Vuletin ◽  
Daniel Riera-Crichton ◽  
Diego Friedheim ◽  
Luis Morano ◽  
...  
Keyword(s):  
Latin America ◽  
Fiscal Adjustment ◽  
Long Run ◽  
Short Run ◽  
The Caribbean

scholarly journals A cross-sectoral analysis of the relation between labor productivity and labor compensation in the European Union

2021 ◽  
Vol 62 ◽  
pp. 54-65
Author(s):  
A.D. Fofack ◽  
◽  
S.D. Temkeng ◽  
Keyword(s):  
European Union ◽  
Labor Productivity ◽  
Fixed Effects ◽  
The European Union ◽  
Labor Compensation ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
The Mean ◽  
Productivity Gains

The aim of this paper is to assess and compare the link between labor productivity and compensation in four industries — air transport, electronics, finance, and telecommunications — of twenty‐five member states of the European Union (EU) from 2000 to 2014. The long‐run and short‐run dynamics of productivity and compensation are analyzed using the pooled mean group (PMG), the mean group (MG) and the dynamic fixed effects (DFE) estimators. The results confirm the existence of a gap between productivity and compensation in each of those industries as mentioned in previous studies. However, the results show that despite that gap, the link between the two variables is not broken. That is, productivity and compensation are not only linked in the long run, but they also return to their long‐run equilibrium after every short‐run disturbance. The econometric analysis also reveals that the relation between productivity and compensation does not follow a significantly different pattern from one industry to the other. These findings robust to alternative models, estimation techniques and across industries, suggest that there are some other cross‐sectoral factors preventing productivity gains to be fully reflected on paychecks.

scholarly journals China’s Rebalancing

2020 ◽  
Vol 20 (239) ◽  
Author(s):  
Nitya Aasaavari ◽  
Fabio Di Vittorio ◽  
Ana Lariau ◽  
Yuebo Li ◽  
Rui Mano ◽  
...  
Keyword(s):  
Latin America ◽  
Growth Potential ◽  
Trade Barriers ◽  
Positive Outcomes ◽  
Export Markets ◽  
Long Run ◽  
The World ◽  
Large Growth ◽  
The Caribbean ◽  
Positive Effect

Asia and Latin America and the Caribbean (LAC), two regions with large growth potential, have become increasingly connected over the last 20 years. China has emerged not only as a top trading partner, but also as an important competitor of LAC exports. China’s retreat from certain markets, due to the ongoing rebalancing process, could open new opportunities for LAC exporters but also entail some challenges. Our results show that China’s rebalancing will have an overall positive effect on LAC’s GDP and exports in the long run, but this effect is small and uneven across countries, leading to winners and losers. We also provide evidence that other countries, such as India, are currently trying to fill the gap left by China and could undermine LAC’s competitive advantage in some export markets. In this context, reduction of trade barriers and further integration within the region and/or with the rest of the world would lead to unequivocally positive outcomes for all LAC countries. The COVID-19 shock might exacerbate the effects identified in our analysis.

scholarly journals Productivity Losses from Financial Frictions: Can Self-Financing Undo Capital Misallocation?

2014 ◽  
Vol 104 (10) ◽  
pp. 3186-3221 ◽  
Author(s):  
Benjamin Moll
Keyword(s):  
Steady State ◽  
Financial Frictions ◽  
Aggregate Productivity ◽  
Solow Model ◽  
Productivity Shocks ◽  
Collateral Constraints ◽  
Productivity Losses ◽  
Long Run ◽  
Short Run ◽  
Capital Misallocation

I develop a highly tractable general equilibrium model in which heterogeneous producers face collateral constraints, and study the effect of financial frictions on capital misallocation and aggregate productivity. My economy is isomorphic to a Solow model but with time-varying TFP. I argue that the persistence of idiosyncratic productivity shocks determines both the size of steady-state productivity losses and the speed of transitions: if shocks are persistent, steady-state losses are small but transitions are slow. Even if financial frictions are unimportant in the long run, they tend to matter in the short run and analyzing steady states only can be misleading. (JEL E21, E22, E23, G32, L26, O16)

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