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SUMMARY:Financial shocks\, productivity\, and prices
DTSTART:20250523T114500
DTEND:20250523T130000
DTSTAMP:20260415T080901Z
UID:e48072e82b206413f5b586fa290ef0843f215b65ab4432aa4b32940c
CATEGORIES:Conferences - Seminars
DESCRIPTION:Simone Lenzu\, Stern School of Business at NYU\nWe study the i
 nterconnection between the productivity and pricing effects of financial s
 hocks. Combining administrative records on firm-level output prices and qu
 antities with quasi-experimental variation in credit supply\, we show that
  a tightening of credit conditions has a persistent\, yet delayed\, negati
 ve effect on firms’ long-run physical productivity growth (TFPQ) but als
 o induces firms to change their pricing policies. Commonly used revenue-ba
 sed productivity measures (TFPR)—which conflate price and productivity
 —offer biased predictions regarding the consequences of financial shocks
  for firms' productivity growth\, underestimating the long-run elasticity 
 of physical productivity to credit supply by half. We also show that the p
 ricing adjustments themselves have productivity implications. Firms use lo
 w pricing as a source of internal financing\, allowing them to avoid cutti
 ng expenditures on productivity-enhancing activities\, thereby softening t
 he impact of financial shocks. We incorporate these forces into a quantita
 tive model of firm dynamics to quantify the importance of productivity and
  pricing dynamics (and their interplay) in driving the scarring effects of
  financial crises on aggregate productivity and welfare.\n\nPaper Lenzu
LOCATION:UniL Campus\, Room Extra 126
STATUS:CONFIRMED
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