Analysis of Nine U.S. Recessions and Three Expansions

Ray C. Fair ()
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Ray C. Fair: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/ray-fair

No 2260, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Nine U.S. recessions and three expansions are analyzed in this paper using a structural macroeconometric model. With two exceptions and one partial exception, the episodes are predicted well by the model, including the 2008-2009 recession, conditional on the actual values of the exogenous variables. The main exogenous variables are stock prices, housing prices, import prices, exports, and exogenous government policy variables. Monetary policy is endogenous. Fluctuations in stock and housing prices (housing prices after 1995) are important drivers of output fluctuations-large wealth effects on household expenditures.

Keywords: Business cycles; Recessions; Expansions (search for similar items in EconPapers)
JEL-codes: E1 E2 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2020-10
New Economics Papers: this item is included in nep-mac
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