Estimating Hysteresis Effects

Francesco Furlanetto, Antoine Lepetit, Ørjan Robstad, Juan F Rubio-Ramirez and Pal Ulvedal

No 2021-11, Working Papers from FEDEA

Abstract: In this paper we identify demand shocks that can have a permanent effect onoutput through hysteresis effects. We call these shocks permanent demand shocks.They are found to be quantitatively important in the United States, in particularwhen the Great Recession is included in the sample. Permanent demand shocksdriven recessions lead to a permanent decline in employment and investment (including R&D investment) while output per worker is largely unaffected. We findstrong evidence that hysteresis transmits through a rise in long-term unemployment and a decline in labor force participation and disproportionately affects theleast productive workers.

Date: 2021-06
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://documentos.fedea.net/pubs/dt/2021/dt2021-11.pdf (application/pdf)

Related works:
Journal Article: Estimating Hysteresis Effects (2025)
Working Paper: Estimating Hysteresis Effects (2021)
Working Paper: Estimating Hysteresis Effects (2021)
Working Paper: Estimating Hysteresis Effects (2021)
Working Paper: Estimating hysteresis effects (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fda:fdaddt:2021-11

Access Statistics for this paper

More papers in Working Papers from FEDEA
Bibliographic data for series maintained by Carmen Arias ().