Economic shocks and growth: spatio-temporal perspectives on Europe's economies in a time of crisis
AbstractThe response by regional and national economies to exogenous impulses has a well-established literature in both spatial econometrics and in mainstream econometrics and is of considerable importance given the current economic crisis. This paper focuses on dynamic counterfactual predictions and impulse-response functions to provide insight regarding the question of whether responses to economic shocks are transitory or permanent. Analysis shows that output shocks have permanent effects on productivity with economies adjusting to new levels following a shock. This suggests that the current recession will be embodied permanently within the memory of some of Europe's leading economies as a hysteretic effect.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47292.
Date of creation: Aug 2012
Date of revision:
vector error correction; European Union; economic shocks; crisis; Verdoorn law; productivity;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-09 (All new papers)
- NEP-EFF-2013-06-09 (Efficiency & Productivity)
- NEP-URE-2013-06-09 (Urban & Real Estate Economics)
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