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Business Cycle Accounting for the COVID-19 Recession

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  • Daniel Gomes Fernandes

    (Nova School of Business and Economics)

Abstract

We apply the Business Cycle Accounting framework to the COVID-19 recession in the Euro Area and the United States of America. We conclude that the efficiency wedge had the most important role in the Euro Area, followed by the labor and investment wedges. In the United States, the labor wedge was most crucial, with the investment wedge coming in second. We present hypotheses, supported by our theoretical framework, for the dichotomy of the role of the efficiency wedge between the studied regions.

Suggested Citation

  • Daniel Gomes Fernandes, 2022. "Business Cycle Accounting for the COVID-19 Recession," Notas Económicas, Faculty of Economics, University of Coimbra, issue 55, pages 47-66, December.
    • Handle: RePEc:gmf:journl:y:2022:i:55:p:47:66
    DOI: 10.14195/2183-203X_55_2
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    More about this item

    Keywords

    COVID-19; business cycle accounting; macroeconomics; financial crises; financial frictions; wedges.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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