Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record

Michael Bordo and Joseph Haubrich

No 18194, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do steep recoveries follow deep recessions? Does it matter if a credit crunch or banking panic accompanies the recession? Moreover does it matter if the recession is associated with a housing bust? We look at the American historical experience in an attempt to answer these questions. The answers depend on the definition of a financial crisis and on how much of the recovery is considered. But in general recessions associated with financial crises are generally followed by rapid recoveries. We find three exceptions to this pattern: the recovery from the Great Contraction in the 1930s; the recovery after the recession of the early 1990s and the present recovery. The present recovery is strikingly more tepid than the 1990s. One factor we consider that may explain some of the slowness of this recovery is the moribund nature of residential investment, a variable that is usually a key predictor of recessions and recoveries.

JEL-codes: N1 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-his
Note: DAE ME
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Citations: View citations in EconPapers (62)

Published as Michael D. Bordo & Joseph G. Haubrich, 2017. "DEEP RECESSIONS, FAST RECOVERIES, AND FINANCIAL CRISES: EVIDENCE FROM THE AMERICAN RECORD," Economic Inquiry, vol 55(1), pages 527-541.

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Journal Article: DEEP RECESSIONS, FAST RECOVERIES, AND FINANCIAL CRISES: EVIDENCE FROM THE AMERICAN RECORD (2017)
Working Paper: Deep recessions, fast recoveries, and financial crises: evidence from the American record (2012)
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