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The CEPII Newsletter       
October 2019        



The French edition is slightly different as it also includes material available in French only  

Europe Monnaie & Finance Trade & Globalization Migrations Economic Policy Emerging Economies Competitivness & Growth Environment & Natural Ressources
  Focus

Europe in the Sino-American Trade War
 

The US trade policy is severely destabilising the international trade system. The European Union is fighting to maintain the latter's stability, which is under dire threat.
Cecilia Bellora >>>
  Edito




Sectoral reallocations, Real estate shocks, and productivity divergence in Europe

This paper investigates the role of sectoral reallocations in the divergence of productivity in Europe, based on a database for 33 sectors and 14 countries between 1995 and 2015. Using the contribution of sectoral productivity growth to Total Factor Productivity (TFP) at the country level, we highlight that variations in the relative size of sectors - less productive sectors growing relatively to more productive ones - have been at the origin of variable productivity losses in main European countries. Parallel to this divergence, European countries experienced heterogeneous real estate price dynamics, which took the form, in some economies, of massive boom-bust cycles. We investigate real estate shocks as a potential source of sectoral reallocations through a collateral mechanism. These shocks turn out to be a strong driver of productivity divergence between European countries.
Thomas Grjebine, Jérôme Héricourt & Fabien Tripier
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ISSN: 1255-7072
Editorial Director : Antoine Bouët
Managing Editor : Dominique Pianelli