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No Ordinary Recession

Author

Listed:
  • Axel Leijonhufvud

    (University of Trento, Italy; UCLA)

Abstract

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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    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/53-54-2-Leijonhufvud.pdf
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    More about this item

    Keywords

    balance sheets; deleveraging; fiscal policy; international crisis; recession;
    All these keywords.

    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; Modern Monetary Theory
    • G01 - Financial Economics - - General - - - Financial Crises

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