Recoveries

Fatás, Antonio and Ilian Mihov
Authors registered in the RePEc Author Service: Antonio Fatas

No 9551, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The recovery from the last recession has been slower than any other recovery in the post-WWII period both in the US and in many other advanced economies. There is an ongoing debate around the causes of such a slow recovery. Are there any structural factors that are constraining the speed of recovery? Is it simply that recoveries from financial crises are slower than others? How should monetary and fiscal policy act in these circumstances? In this debate, there is a constant reference to a recovery phase in the business cycle, but such a phase is absent in the most-accepted methodology to characterize business cycles: that of the NBER business cycle dating committee. This paper explores data from the US to characterize and date a recovery phase in the business cycle. Rather than interpreting fluctuations as a two-phase cycle, we describe it as a succession of three distinct phases: expansions, recessions and recoveries. We discuss alternative methods to identify recoveries and provide a discussion of the potential benefits from using a proper definition of the recovery phase.

Keywords: Business cycles; Recoveries; Recessions; Nber business cycles dating committee (search for similar items in EconPapers)
JEL-codes: E32 E50 E60 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-mac and nep-pke
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