The economic impact of recession announcements

Andrew C. Eggers, Martin Ellison and Sang Seok Lee

Journal of Monetary Economics, 2021, vol. 120, issue C, 40-52

Abstract: The convention in the news media is to announce a recession if a country experiences two consecutive quarters of negative growth. We exploit the arbitrary threshold implied by this practice to identify the economic impact of recession announcements through a Regression Discontinuity Design (RDD). Estimation results show that news of a recession leads to a discontinuous fall in consumer confidence, consumption growth and final estimates of GDP growth in a panel of countries. The effect is large, robust and statistically significant.

Keywords: Business cycle; Recessions; Regression discontinuity design; News media (search for similar items in EconPapers)
JEL-codes: C21 E32 E71 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The Economic Impact of Recession Announcements (2020)
Working Paper: The Economic Impact of Recession Announcements (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:120:y:2021:i:c:p:40-52

DOI: 10.1016/j.jmoneco.2021.03.002

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