The universal shape of economic recession and recovery after a shock

Artikel

We show that a simple and intuitive three-parameter equation fits remarkably well the evolution of the gross domestic product (GDP) in current and constant dollars of many countries during times of recession and recovery. We then argue that this equation is the response function of the economy to isolated shocks, hence that it can be used to detect large and small shocks, including those which do not lead to a recession; we also discuss its predictive power. Finally, a two-sector toy model of recession and recovery illustrates how the severity and length of recession depends on the dynamics of transfer rate between the growing and failing parts of the economy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 3 ; Year: 2009 ; Issue: 2009-36 ; Pages: 1-24 ; Kiel: Kiel Institute for the World Economy (IfW)

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Fiscal and Monetary Policy in Development ; One, Two, and Multisector Growth Models
• Thema: Economic growth ; GDP ; shocks ; response function ; modelling ; prediction ; optimal policy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Challet, Damien ; Solomon, Sorin ; Yaari, Gur
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2009

Weitere Informationen

• DOI: doi:10.5018/economics-ejournal.ja.2009-36
• Handle: http://hdl.handle.net/10419/28106
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ