Fozan Fareed, Bastiaan Overvest, 20 May 2021

The COVID-19 crisis may affect future productivity through its impact on business dynamics. This column argues that business dynamics – in particular business entries, exits, and bankruptcies – are slowing down, which can have adverse effects on long-term productivity. Over the course of 2020, fewer new businesses were established than in any ‘normal’ year and fewer closed down than during the Global Crisis in 2009. Most new entrants are self-employed and online businesses, especially in the wholesale and retail trade sector.

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