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Do large recessions reduce output permanently?

  • Hosseinkouchack, Mehdi
  • Wolters, Maik H.

We apply a recent quantile autoregression unit root test to US GDP. The test takes into account that the transmission of a shock might depend on the sign and the size of the shock. We find that positive and negative shocks including large recessionary shocks like the 2008/2009 crisis have permanent effects on output.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 121 (2013)
Issue (Month): 3 ()
Pages: 516-519

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Handle: RePEc:eee:ecolet:v:121:y:2013:i:3:p:516-519
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