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No Ordinary Recession


  • Axel Leijonhufvud

    (University of Trento, Italy; UCLA)


This recession is different. The balance sheets of consumers, companies and banks are under pressure. The private sector seeks to reduce its debt and this counteracts the Keynesian stimulus more than what the usual flow calculations would suggest. There is no doubt that the deleveraging of banks is the most dangerous factor. The fiscal stimulus will have no significant impact unless the deleveraging of the financial system comes to a halt.

Suggested Citation

  • Axel Leijonhufvud, 2009. "No Ordinary Recession," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(53-54), pages 59-65, January -.
  • Handle: RePEc:bcr:ensayo:v:1:y:2009:i:53-54:p:59-65

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    References listed on IDEAS

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    Cited by:

    1. Jafri, Juvaria, 2014. "Should we be Austere? A Normative look at Public Debt," MPRA Paper 63337, University Library of Munich, Germany.

    More about this item


    balance sheets; deleveraging; fiscal policy; international crisis; recession;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • G01 - Financial Economics - - General - - - Financial Crises


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