How Economic Crises Damage Potential Output – Evidence from the Great Recession
Dovern J, Zuber C (2020)
Publication Language: English
Publication Type: Journal article, Original article
Publication year: 2020
Journal
Book Volume: 65
Article Number: 103239
URI: https://www.sciencedirect.com/science/article/abs/pii/S0164070420301658
DOI: 10.1016/j.jmacro.2020.103239
Abstract
Economic crises lead to lower potential output (PO) estimates, but little is known about which components of PO are revised. Our paper answers the questions of how much, how fast, and how persistently estimates of the capital stock, of trend labor, and of trend total factor productivity are revised downwards after major economic crises. It shows that revisions to different components of PO contributed equally to the substantial overall decline in estimated PO levels. Revisions of trend labor are predominantly driven by revisions of the NAWRU. The heterogeneity of revisions across EU countries after the Great Recession is large, suggesting that different policies are needed to bring countries back to their previous growth paths.
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Germany (DE)How to cite
APA:
Dovern, J., & Zuber, C. (2020). How Economic Crises Damage Potential Output – Evidence from the Great Recession. Journal of Macroeconomics, 65. https://doi.org/10.1016/j.jmacro.2020.103239
MLA:
Dovern, Jonas, and Christopher Zuber. "How Economic Crises Damage Potential Output – Evidence from the Great Recession." Journal of Macroeconomics 65 (2020).
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