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Economic shocks and growth: spatio-temporal perspectives on Europe's economies in a time of crisis


  • Doran, Justin
  • Fingleton, Bernard


The response by regional and national economies to exogenous impulses has a well-established literature in both spatial econometrics and in mainstream econometrics and is of considerable importance given the current economic crisis. This paper focuses on dynamic counterfactual predictions and impulse-response functions to provide insight regarding the question of whether responses to economic shocks are transitory or permanent. Analysis shows that output shocks have permanent effects on productivity with economies adjusting to new levels following a shock. This suggests that the current recession will be embodied permanently within the memory of some of Europe's leading economies as a hysteretic effect.

Suggested Citation

  • Doran, Justin & Fingleton, Bernard, 2012. "Economic shocks and growth: spatio-temporal perspectives on Europe's economies in a time of crisis," MPRA Paper 47292, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:47292

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    Cited by:

    1. Justin Doran & Bernard Fingleton, 2015. "Resilience from the micro perspective," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 8(2), pages 205-223.
    2. Petar Sorić & Ivana Lolić & Mirjana Čižmešija, 2016. "European economic sentiment indicator: an empirical reappraisal," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(5), pages 2025-2054, September.
    3. repec:eee:regeco:v:68:y:2018:i:c:p:260-267 is not listed on IDEAS
    4. Justin Doran & Bernard Fingleton, 2016. "Employment Resilience in Europe and the 2008 Economic Crisis: Insights from Micro-Level Data," Regional Studies, Taylor & Francis Journals, vol. 50(4), pages 644-656, April.
    5. Cellini, Roberto & Cuccia, Tiziana, 2018. "Do behaviours in cultural markets affect economic resilience? An analysis of the Italian regions," MPRA Paper 83904, University Library of Munich, Germany.
    6. Susan Christopherson & Gordon L. Clark & John Whiteman, 2015. "Introduction: the Euro crisis and the future of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(5), pages 843-853.
    7. repec:bla:presci:v:96:y:2017:i:3:p:451-476 is not listed on IDEAS

    More about this item


    vector error correction; European Union; economic shocks; crisis; Verdoorn law; productivity;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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