A neoclassical analysis of the Great Recession: a historical comparison

Keisuke Otsu and Florian Gerth ()
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Florian Gerth: University of Kent

Economics Bulletin, 2015, vol. 35, issue 4, 2363-2373

Abstract: In this paper we conduct a quantitative analysis to investigate the pattern of output loss during past banking crisis episodes by comparing the Great Recession, Great Depression and "Inter-Greats" periods. We find that during all periods output does not fully recover after 5 years from the onset of the banking crisis. However, while the output loss during the Great Recession was as large as that during the Great Depression, the output decline was much more gradual during the Great Recession. Moreover, a neoclassical growth model with productivity shocks can account for the Great Recession period extremely well compared to the Great Depression and Inter-Greats periods.

Keywords: Great Recession; Total Factor Productivity; Neoclassical Growth Model (search for similar items in EconPapers)
JEL-codes: E1 E3 (search for similar items in EconPapers)
Date: 2015-11-20
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Citations: View citations in EconPapers (3)

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