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International recessions

Author

Listed:
  • Vincenzo Quadrini

    (University of Southern California)

  • Fabrizio Perri

    (University of Minnesota)

Abstract

One key feature of the 2008-2009 crisis has been its international dimension, as most countries have experienced large synchronous contractions. The recent crisis has also been characterized by a sharp fall in employment but not in productivity. These two characterizing features of the recent recession are not present in many of the previous contractions. We develop an explicit model of financial frictions to show that these changes are consistent with the view that `credit shocks' have been playing a more prominent role as a source of business cycle fluctuations in an environment with international mobility of capital.

Suggested Citation

  • Vincenzo Quadrini & Fabrizio Perri, 2010. "International recessions," 2010 Meeting Papers 222, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:222
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • 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
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • G01 - Financial Economics - - General - - - Financial Crises

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