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High-growth recoveries, inventories and the Great Moderation

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  • Camacho, Maximo
  • Perez Quiros, Gabriel
  • Rodriguez Mendizabal, Hugo

Abstract

We present evidence about the disappearance of the high-growth recoveries from recessions with intense job creation typically observed until the eighties. This result matches the belief that recessions now have an L-shape as opposed to the old-time recessions that always had a V-shape. We also show how this change in business cycle dynamics can explain part of the Great Moderation. We postulate that these two phenomena may be due to changes in inventory management brought about by improvements in information and communications technologies.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 35 (2011)
Issue (Month): 8 (August)
Pages: 1322-1339

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Handle: RePEc:eee:dyncon:v:35:y:2011:i:8:p:1322-1339

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Web page: http://www.elsevier.com/locate/jedc

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Keywords: Business cycle features Great Moderation High-growth recovery;

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References

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  17. James A. Kahn & Margaret M. McConnell & Gabriel Perez-Quiros, 2002. "On the causes of the increased stability of the U.S. economy," Economic Policy Review, Federal Reserve Bank of New York, issue May, pages 183-202.
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Cited by:
  1. Bec, Frédérique & Bessec, Marie, 2013. "Inventory Investment Dynamics and Recoveries: A Comparison of Manufacturing and Retail Trade Sectors," Economics Papers from University Paris Dauphine 123456789/11777, Paris Dauphine University.

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