Working Paper
A Note on Banking and Housing Crises and the Strength of Recoveries
Authors
Publication Date
JEL Classification
C33
E32
Key Words
Related Topics
Economic & Financial Crises
Business Cycle World
Business Cycle
We investigate whether recoveries following normal recessions differ from recoveries following recessions that are associated with either banking crises or housing crises. Using a parametric panel framework that allows for a bounce-back in the level of output during the recovery, we find that normal recessions are followed by strong recoveries in advanced economies. This bounce-back is absent following recessions associated with banking crises and housing crises. Consequently, the permanent output losses of recessions associated with banking crises and housing crises are considerably larger than those of normal recessions.
