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2 posts from May 2021

May 05, 2021

Many Small Businesses in the Services Sector Are Unlikely to Reopen



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The services sector was hit hard during the COVID-19 pandemic. Small businesses were particularly affected, and many of them were forced to close. We examine the state of these firms using micro data from Homebase (HB), a scheduling and time tracking tool that is used by around 100,000 businesses, mostly small firms, in the leisure and hospitality and retail industries. The data reveal that 35 percent of businesses that were active prior to the pandemic are still closed and that most have been inactive for twenty weeks or longer. We estimate that each additional week of being closed reduces the probability that a business reopens by 2 percentage points. Moreover, an additional week of business closure lowers the share of workers that are rehired at reopening. Our estimates imply that only about 4 percent of the workers that are still laid off from the currently closed businesses will eventually be rehired by these businesses.

Continue reading "Many Small Businesses in the Services Sector Are Unlikely to Reopen" »

Posted by Blog Author at 7:00 AM in Labor Market, Pandemic | Permalink | Comments (0)

May 03, 2021

Endogenous Supply Chains, Productivity, and COVID-19



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During the COVID-19 pandemic, many industries adapted to new social distancing guidelines by adopting new technologies, providing protective equipment for their employees, and digitizing their methods of production. These changes in industries’ supply chains, together with monetary and fiscal stimulus, contributed to dampening the economic impact of COVID-19 over time. In this post, I discuss a new framework that analyzes how changes in supply chains can drive economic growth in the long run and mitigate recessions in the short run.

Continue reading "Endogenous Supply Chains, Productivity, and COVID-19" »

Posted by Blog Author at 7:00 AM in Macroecon, Pandemic, Recession | Permalink | Comments (0)

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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