International Evidence on Recovery from Recessions

16 Pages Posted: 26 Feb 2013

See all articles by Valerie Cerra

Valerie Cerra

International Monetary Fund (IMF)

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics; CEPR

Sweta C. Saxena

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2013

Abstract

Although negative shocks have persistent effects on output on average, this article shows that macroeconomic policies can influence the speed of recovery and mitigate the persistence of the shock. Indeed, monetary and fiscal stimulus and foreign aid can spur a rebound, with impacts that are asymmetrically stronger than in non‐recovery years. Real depreciation and the exchange rate regime also have asymmetric growth effects in a recovery year relative to other years of expansion.

JEL Classification: C23, E32, F43, O43

Suggested Citation

Cerra, Valerie and Panizza, Ugo and Saxena, Sweta C., International Evidence on Recovery from Recessions (April 2013). Contemporary Economic Policy, Vol. 31, Issue 2, pp. 424-439, 2013, Available at SSRN: https://ssrn.com/abstract=2224485 or http://dx.doi.org/10.1111/j.1465-7287.2012.00313.x

Valerie Cerra (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8596 (Phone)

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland

CEPR ( email )

London
United Kingdom

Sweta C. Saxena

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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