Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93438
Authors: 
Bluhm, Richard
de Crombrugghe, Denis
Szirmai, Adam
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4594
Abstract: 
This paper defines economic slumps as sequences of structural breaks exhibiting a specific pattern. We identify 58 such episodes between 1950 and 2008 among 138 countries, and then examine the phases of decline and their duration. In some countries declines last extremely long, and we put several likely contributing factors to the test. We find evidence that weak institutions precede crises and, interestingly, positive reforms occur thereafter. Strong institutions shorten the duration of crises, ethnic cleavages do the reverse. However, the negative effects of ethnic cleavages are not insurmountable: an interaction effect suggests they can be offset by appropriate institutions.
Subjects: 
economic slumps
crises
institutions
structural breaks
duration analysis
JEL: 
O43
O11
C41
F43
Document Type: 
Working Paper

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