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What Determined the Depth of Recession?

Author

Listed:
  • Gurvich, E.

    (Economic Expert Group, Moscow, Russia)

  • Prilepskiy, I.

    (Economic Expert Group, Moscow, Russia)

Abstract

The factors that determined substantial cross-country variation of output decline during the recent recession are discussed. The regression analysis is performed for the sample of 172 economies, as well as for the sub-samples of developing and oil-exporting economies. Regression results indicate that three distinct factors had a significant impact on output decline, viz. financial shocks, trade shocks, and precrisis economic imbalances. Explanatory power of the econometric model obtained is fairly large. The contribution of crisis decline factors to the depth of recession is calculated for the developing and emerging economies on average, as well as for Russia. The results of the analysis are used to provide recommendations for reducing the vulnerability of Russian economy to future crises.

Suggested Citation

  • Gurvich, E. & Prilepskiy, I., 2010. "What Determined the Depth of Recession?," Journal of the New Economic Association, New Economic Association, issue 8, pages 55-79.
  • Handle: RePEc:nea:journl:y:2010:i:8:p:55-79
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    References listed on IDEAS

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    1. Rose, Andrew K. & Spiegel, Mark M., 2011. "Cross-country causes and consequences of the crisis: An update," European Economic Review, Elsevier, vol. 55(3), pages 309-324, April.
    2. Felton, Andrew & Reinhart, Carmen M. (ed.), 2009. "The First Global Financial Crisis of the 21st Century Part II: June–December, 2008," Vox eBooks, Centre for Economic Policy Research, number p199.
    3. Berkmen, S. Pelin & Gelos, Gaston & Rennhack, Robert & Walsh, James P., 2012. "The global financial crisis: Explaining cross-country differences in the output impact," Journal of International Money and Finance, Elsevier, vol. 31(1), pages 42-59.
    4. Philip R Lane & Gian Maria Milesi-Ferretti, 2011. "The Cross-Country Incidence of the Global Crisis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(1), pages 77-110, April.
    5. Olivier J. Blanchard & Mitali Das & Hamid Faruqee, 2010. "The Initial Impact of the Crisis on Emerging Market Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 263-323.
    6. Arezki, Rabah & Ismail, Kareem, 2013. "Boom–bust cycle, asymmetrical fiscal response and the Dutch disease," Journal of Development Economics, Elsevier, vol. 101(C), pages 256-267.
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    Cited by:

    1. Gurvich, E., 2016. "Evolution of Russian Macroeconomic Policy in Three Crises," Journal of the New Economic Association, New Economic Association, vol. 29(1), pages 174-181.

    More about this item

    Keywords

    crisis decline factors; financial and trade shocks; regression analysis;

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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