On the Timing and Efficiency of Creative Destruction Export

@article{caballerohammour96, abstract = {We analyze the timing, pace, and efficiency of ongoing job reallocation that results from product and process innovation. There are strong reasons why an efficient economy ought to concentrate both job creation and destruction during recessions, when the opportunity cost of reallocation is lowest. Incomplete contracting between labor and capital can disrupt this synchronized pattern and decouple creation and destruction. Transactional difficulties also lead to technological \"sclerosis,\" characterized by excessively slow renovation. Government incentives to production may alleviate high unemployment but exacerbate sclerosis. In contrast, creation incentives increase the pace of reallocation. An optimal combination of both policies restores economic efficiency.}, author = {Caballero, Ricardo J. and Hammour, Mohamad L.}, citeulike-article-id = {2623124}, citeulike-linkout-0 = {http://www.jstor.org/stable/2946673}, journal = {The Quarterly Journal of Economics}, keywords = {creativedestruction}, number = {3}, pages = {805--852}, posted-at = {2008-04-02 13:37:42}, priority = {2}, title = {On the Timing and Efficiency of Creative Destruction}, url = {http://www.jstor.org/stable/2946673}, volume = {111}, year = {1996} }

TY - JOUR ID - caballerohammour96 L3 - citeulike-article-id:2623124 N2 - We analyze the timing, pace, and efficiency of ongoing job reallocation that results from product and process innovation. There are strong reasons why an efficient economy ought to concentrate both job creation and destruction during recessions, when the opportunity cost of reallocation is lowest. Incomplete contracting between labor and capital can disrupt this synchronized pattern and decouple creation and destruction. Transactional difficulties also lead to technological "sclerosis," characterized by excessively slow renovation. Government incentives to production may alleviate high unemployment but exacerbate sclerosis. In contrast, creation incentives increase the pace of reallocation. An optimal combination of both policies restores economic efficiency. IS - 3 JF - The Quarterly Journal of Economics EP - 852 TI - On the Timing and Efficiency of Creative Destruction VL - 111 SP - 805 KW - creativedestruction AU - Caballero, Ricardo AU - Hammour, Mohamad PY - 1996/// UR - http://www.jstor.org/stable/2946673 ER -