The Effect of Recessions on Potential Output Estimates: Size, Timing, and Determinants

Jonas Dovern and Christopher Zuber

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We analyze when and how much OECD estimates of potential output are revised after recessions and which factors explain the size of these revisions. Inter alia, we find that following a recession, the OECD substantially revises downwards potential output, those revisions are larger than what is to be expected under the assumption of no hysteresis, and the recession depth, the primary balance, and the current account balance are predictors of post-recession revisions of potential output.

JEL-codes: E32 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-mac and nep-opm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168180

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