High-Growth Recoveries, Inventories and the Great Moderation

44 Pages Posted: 23 Aug 2009

See all articles by Maximo Camacho

Maximo Camacho

Autonomous University of Barcelona - Department of Economics; Universidad de Murcia - Departamento de Metodos Cuantitativos

Gabriel Perez-Quiros

Banco de España

Hugo Rodríguez Mendizábal

Institut d'Anàlisi Econòmica (CSIC)

Date Written: August 21, 2009

Abstract

We present evidence about the loss of the so-called "plucking effect", that is, a high-growth phase of the cycle typically observed at the end of recessions. This result matches the belief, presented informally by different authors, that recession may have now permanent effects, or recession have now an L shape versus old-time recessions that always had a V shape. We also show that the loss of the "plucking effect" can explain part of the Great Moderation. We postulate that these two phenomena may be due to changes in inventory management brought about by improvements in information and communications technologies.

Keywords: Business cycle features, Great Moderation, High-growth recovery

JEL Classification: E32, F02, C22

Suggested Citation

Camacho, Maximo and Perez-Quiros, Gabriel and Rodríguez Mendizábal, Hugo, High-Growth Recoveries, Inventories and the Great Moderation (August 21, 2009). Banco de Espana Working Paper No. 0917, Available at SSRN: https://ssrn.com/abstract=1458958 or http://dx.doi.org/10.2139/ssrn.1458958

Maximo Camacho

Autonomous University of Barcelona - Department of Economics ( email )

Avda. Diagonal 690
Barcelona, 08034
Spain

Universidad de Murcia - Departamento de Metodos Cuantitativos ( email )

Campus de Espinardo
30100 Murcia
Spain
+34 968 367 982 (Phone)

Gabriel Perez-Quiros (Contact Author)

Banco de España ( email )

Madrid 28014
Spain

Hugo Rodríguez Mendizábal

Institut d'Anàlisi Econòmica (CSIC) ( email )

UAB Campus
E-08193 Bellaterra
Spain

HOME PAGE: http://rodriguez.iae-csic.org/

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