The universal shape of economic recession and recovery after a shock

Damien Challet, Sorin Solomon and Gur Yaari

Papers from arXiv.org

Abstract: We show that a simple and intuitive three-parameter equation fits remarkably well the evolution of the gross domestic product (GDP) in current and constant dollars of many countries during times of recession and recovery. We then argue that this equation is the response function of the economy to isolated shocks, hence that it can be used to detect large and small shocks, including those which do not lead to a recession; we also discuss its predictive power. Finally, a two-sector toy model of recession and recovery illustrates how the severity and length of recession depends on the dynamics of transfer rate between the growing and failing parts of the economy.

Date: 2008-02, Revised 2009-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://arxiv.org/pdf/0802.2004 Latest version (application/pdf)

Related works:
Journal Article: The universal shape of economic recession and recovery after a shock (2009)
Working Paper: The Universal Shape of Economic Recession and Recovery after a Shock (2009)
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:arx:papers:0802.2004

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().