Recoveries

35 Pages Posted: 17 Jul 2013

See all articles by Antonio Fatás

Antonio Fatás

INSEAD; Centre for Economic Policy Research (CEPR); ABFER

Ilian Mihov

INSEAD; Centre for Economic Policy Research (CEPR)

Date Written: July 2013

Abstract

The recovery from the last recession has been slower than any other recovery in the post-WWII period both in the US and in many other advanced economies. There is an ongoing debate around the causes of such a slow recovery. Are there any structural factors that are constraining the speed of recovery? Is it simply that recoveries from financial crises are slower than others? How should monetary and fiscal policy act in these circumstances? In this debate, there is a constant reference to a recovery phase in the business cycle, but such a phase is absent in the most-accepted methodology to characterize business cycles: that of the NBER business cycle dating committee. This paper explores data from the US to characterize and date a recovery phase in the business cycle. Rather than interpreting fluctuations as a two-phase cycle, we describe it as a succession of three distinct phases: expansions, recessions and recoveries. We discuss alternative methods to identify recoveries and provide a discussion of the potential benefits from using a proper definition of the recovery phase.

Keywords: Business Cycles, NBER Business Cycles Dating Committee, Recessions, Recoveries

JEL Classification: E32, E50, E60

Suggested Citation

Fatas, Antonio and Mihov, Ilian, Recoveries (July 2013). CEPR Discussion Paper No. DP9551. Available at SSRN: https://ssrn.com/abstract=2294810

Antonio Fatas (Contact Author)

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore
+6567995384 (Phone)

HOME PAGE: http://faculty.insead.edu/fatas

Centre for Economic Policy Research (CEPR)

London
United Kingdom

ABFER ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Ilian Mihov

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, Singapore 138680
Singapore
+65 6799 5434 (Phone)

HOME PAGE: http://www.insead.edu/facultyresearch/faculty/personal/imihov/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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