Drivers of large recessions and monetary policy responses

Giovanni Melina and Stefania Villa

Journal of International Money and Finance, 2023, vol. 137, issue C

Abstract: Shocks to capital utilization are introduced in a structural macroeconomic model with financial frictions. Estimates for the Euro Area and the United States show that these shocks were among the most important drivers of the output contraction during the Global Financial Crisis and the COVID-19 Crisis, while financial shocks were more relevant during the Global Financial Crisis. Thanks to the timely and strong intervention of the European Central Bank and the U.S. Federal Reserve, monetary policy shocks had a sizable positive contribution on output and inflation during, and in the aftermath of, the COVID-19 Crisis.

Keywords: COVID-19; Global financial crisis; Great lockdown; Monetary policy; Capital utilization (search for similar items in EconPapers)
JEL-codes: E4 E5 E6 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560623000955
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Drivers of large recessions and monetary policy responses (2023)
Working Paper: Drivers of Large Recessions and Monetary Policy Responses (2023)
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:eee:jimfin:v:137:y:2023:i:c:s0261560623000955

DOI: 10.1016/j.jimonfin.2023.102894

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().