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A Note On Banking And Housing Crises And The Strength Of Recoveries

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  • Boysen-Hogrefe, Jens
  • Jannsen, Nils
  • Meier, Carsten-Patrick

Abstract

We investigate whether recoveries following normal recessions differ from recoveries following recessions that are associated with either banking crises or housing crises. Using a parametric panel framework that allows for a bounce-back in the level of output during the recovery, we find that normal recessions are followed by strong recoveries in advanced economies. This bounce-back is absent following recessions associated with banking crises and housing crises. Consequently, the permanent output losses of recessions associated with banking crises and housing crises are considerably larger than those of normal recessions.
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  • Boysen-Hogrefe, Jens & Jannsen, Nils & Meier, Carsten-Patrick, 2016. "A Note On Banking And Housing Crises And The Strength Of Recoveries," Macroeconomic Dynamics, Cambridge University Press, vol. 20(07), pages 1924-1933, October.
  • Handle: RePEc:cup:macdyn:v:20:y:2016:i:07:p:1924-1933_00
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    Cited by:

    1. Emanuele Ciola & EDOARDO GAFFEO & Mauro Gallegati, 2018. "Matching frictions, credit reallocation and macroeconomic activity: how harmful are financial crises?," DEM Working Papers 2018/05, Department of Economics and Management.
    2. repec:eee:intfor:v:33:y:2017:i:4:p:760-769 is not listed on IDEAS
    3. R. Barrell & D. Karim & Corrado Macchiarelli, 2017. "Towards an understanding of credit cycles: do all credit booms cause crises?," Working Paper series 17-28, Rimini Centre for Economic Analysis.
    4. Dovern, Jonas & Jannsen, Nils, 2017. "Systematic errors in growth expectations over the business cycle," International Journal of Forecasting, Elsevier, vol. 33(4), pages 760-769.

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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