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Title:The Universal Shape of Economic Recession and Recovery after a Shock PDF Logo
Authors:Challet, Damien
Solomon, Sorin
Yaari, Gur
Issue Date:2009
Series/Report no.:Economics Discussion Papers / Institut für Weltwirtschaft 2009-6
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 the times of recession and recovery. We then argue that it can be used to detect shocks and discuss its predictive power. Finally, a two-sector theoretical 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.
Subjects:Economic growth
transition economies
GDP
modelling
prediction
optimal policy
JEL:O23
C32
O41
Creative Commons License:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Working Paper
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Discussion Papers

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