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Keisuke Otsu and Florian Gerth
''A neoclassical analysis of the Great Recession: a historical comparison''
( 2015, Vol. 35 No.4 )
In this paper we conduct a quantitative analysis to investigate the pattern of output loss during past banking crisis episodes by comparing the Great Recession, Great Depression and "Inter-Greats" periods. We find that during all periods output does not fully recover after 5 years from the onset of the banking crisis. However, while the output loss during the Great Recession was as large as that during the Great Depression, the output decline was much more gradual during the Great Recession. Moreover, a neoclassical growth model with productivity shocks can account for the Great Recession period extremely well compared to the Great Depression and Inter-Greats periods.
Keywords: Great Recession, Total Factor Productivity, Neoclassical Growth Model
JEL: E1 - General Aggregative Models: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Apr 09 2015 Manuscript Accepted : Nov 20 2015

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