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Same, but different? A state-level chronology of the 2014-2016 Brazilian economic recession and comparisons with the GFC and (early data on) COVID-19

Author

Listed:
  • Jéfferson A. Colombo

    (Getulio Vargas Foundation (FGV EESP, Brazil))

  • Martinho R. Lazzari

    (Planning Secretariat of the State of Rio Grande do Sul (Brazil))

Abstract

This paper identifies and discusses the regional heterogeneity of the Brazilian great economic recession of 2014-16. Specifically, we outline a state-level chronology of the recession by applying the Bry-Boschan algorithm, using the states' monthly index of economic activity as reference variables. The results indicate that the recession lasted 32 months, and the economic activity fell (peak to trough) 11.8% for the average Brazilian state. However, we find a significant heterogeneity regarding timing, duration, and magnitude of the recession -- on average, more industrialized states (with greater participation of the agricultural sector) entered before (after) and stayed more (less) in a state of recession. We also find the dispersion, severity, and diffusion of the 2014-16 recession across states was far more significant than in the 2008-09 economic recession. Finally, preliminary data suggests that the significant and widespread drop in regional economic activity following the COVID-19 shock is 12.7% and 77.1% larger than those observed in the 2014-16 and the 2008-09 recessions, respectively. Our results have critical implications for policymakers.

Suggested Citation

  • Jéfferson A. Colombo & Martinho R. Lazzari, 2020. "Same, but different? A state-level chronology of the 2014-2016 Brazilian economic recession and comparisons with the GFC and (early data on) COVID-19," Economics Bulletin, AccessEcon, vol. 40(3), pages 2445-2456.
    • Handle: RePEc:ebl:ecbull:eb-20-00634
    as

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    References listed on IDEAS

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    1. Michael Porter, 2003. "The Economic Performance of Regions," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 549-578.
    2. Travis Berge & Òscar Jordà, 2013. "A chronology of turning points in economic activity: Spain, 1850–2011," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 1-34, March.
    3. Jason Brown, 2017. "Identifying State-Level Recessions," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 85-108.
    4. Gerhard Bry & Charlotte Boschan, 1971. "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs," NBER Books, National Bureau of Economic Research, Inc, number bry_71-1, August.
    5. Gerhard Bry & Charlotte Boschan, 1971. "Foreword to "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs"," NBER Chapters, in: Cyclical Analysis of Time Series: Selected Procedures and Computer Programs, pages -1, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Yousaf, Imran & Beljid, Makram & Chaibi, Anis & Ajlouni, Ahmed AL, 2022. "Do volatility spillover and hedging among GCC stock markets and global factors vary from normal to turbulent periods? Evidence from the global financial crisis and Covid-19 pandemic crisis," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).
    2. Bampi, Rodrigo E. & Colombo, Jefferson A., 2021. "Heterogeneous effects of foreign exchange appreciation on industrial output: Evidence from disaggregated manufacturing data," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 431-451.

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    Keywords

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    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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