Latest / The Productivity Podcast with Fexingo: Output, Efficiency, and Long-Term Economic Growth
Why Recessions Boost Productivity Long-Term
Episode 30 of The Productivity Podcast explores a counterintuitive economic pattern: the productivity-enhancing effect of recessions. Lucas and Luna examine the 2008 financial crisis as a case study, where aggregate labor productivity in the U.S. jumped 3.5 percent in 2009 despite soaring unemployment. They break down the 'cleansing effect' — weaker firms fail, stronger ones gain market share, and surviving companies invest more aggressively in automation and process improvement. But there's a dark side: the scarring effect on displaced workers and the risk of rising market…
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