Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217155 
Year of Publication: 
2019
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 10 [Issue:] 2 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2019 [Pages:] 735-773
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We study the causes behind the shift in the level of U.S. GDP following the Great Recession. To this end, we propose a model featuring endogenous productivity à la Romer and a financial friction à la Kiyotaki-Moore. Adverse financial disturbances during the recession and the lack of strong tailwinds post-crisis resulted in a severe contraction and the downward shift in the economy's trend. Had financial conditions remained stable during the crisis, the economy would have grown at its average growth rate. From a historical perspective, the Great Recession was unique because of the size and persistence of adverse shocks, and the lackluster performance of favorable shocks since 2010.
Subjects: 
Endogenous productivity
financial friction
great recession
liquidity shocks
trend shift
JEL: 
E22
E32
E37
G01
O4
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.