Drivers of the Post-crisis Slump in the Eurozone and the US

Robert Kollmann (), Beatrice Pataracchia, Rafal Raciborski, Marco Ratto, Werner Roeger and Lukas Vogel

Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: The Global Crisis led to a sharp contraction and long-lasting slump in both Eurozone and US real activity, but the post-crisis adjustment in the Eurozone and the US shows striking differences. This column argues that financial shocks were key determinants of the 2008-09 Great Recession, for both the Eurozone and the US. The post-2009 slump in the Eurozone mainly reflects a combination of adverse aggregate demand and supply shocks, in particular lower productivity growth, and persistent adverse shocks to capital investment linked to the poor health of the Eurozone financial system. Mono-causal explanations of the persistent slump are thus insufficient. Adverse financial shocks were less persistent for the US.

Keywords: post-crisis slump; eurozone; united states; demand and supply shocks; financial shocks (search for similar items in EconPapers)
JEL-codes: E20 E30 E50 E60 F30 F40 (search for similar items in EconPapers)
Pages: 8 p.
Date: 2017-04
New Economics Papers: this item is included in nep-mac
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Working Paper: Drivers of the Post-Crisis Slump in the Eurozone and the US (2017)
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