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dc.titleSectoral Productivity Growth, COVID-19 Shocks, and Infrastructure
dc.contributor.authorAhumada, Hildegart
dc.contributor.authorCavallo, Eduardo A.
dc.contributor.authorEspina-Mairal, Santos
dc.contributor.authorNavajas, Fernando
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America and the Caribbean
dc.date.available2021-07-23T00:00:00
dc.date.issue2021-07-23T00:00:00
dc.description.abstractThis 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.
dc.format.extent45
dc.identifier.doihttp://dx.doi.org/10.18235/0003411
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Sectoral-Productivity-Growth-COVID-19-Shocks-and-Infrastructure.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectProductivity Growth
dc.subjectManufacturing Industry
dc.subjectProductivity Shock
dc.subjectCoronavirus
dc.subjectPandemics
dc.subjectProductive Structure
dc.subjectInfrastructure Work
dc.subjectLabor Productivity
dc.subjectConstruction Industry
dc.subject.jelcodeO47 - Empirical Studies of Economic Growth • Aggregate Productivity • Cross-Country Output Convergence
dc.subject.jelcodeC51 - Model Construction and Estimation
dc.subject.keywordsInfrastructure;Productivity;COVID-19;COVID-19;COVID-19;COVID-19;COVID-19;Sector shocks
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01256
idb.operationRG-T2867
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