Ball, L. (2014) “The Great Recession’s long-term damage“, VoxEU Organisation, 01 Ιουλίου.
Whereas textbook macroeconomic theory suggests that output should return to potential after a recession, there is mounting evidence that deep recessions have highly persistent effects on output. This column reports estimates of the long-term damage caused by the Great Recession. In most countries in the sample, the loss of potential output – 8.4% on average – has been almost as large as the loss of actual output. In the countries hit hardest by the recession, the growth rate of potential output is much lower today than it was before 2008.
According to macroeconomics textbooks, a fall in aggregate demand causes a recession in which output drops below potential output – the normal level of production given the economy’s resources and technology. This effect is temporary, however. A recession is followed by a recovery period in which output returns to potential, and potential itself is not affected significantly by the recession.
Σχετικές αναρτήσεις:
- Muro, D. & Vidal, G. (2014) “Mind the Gaps: The Political Consequences of the Great Recession in Europe“, Eurocrisis in the Press, LSE EUROPP, 10 Ιουνίου.
- Ball, M. L. (2014) “Long-Term Damage from the Great Recession in OECD Countries“, NBER Working Paper No. 20185, Μάιος.
- Matsaganis, M. & Leventi, C. (2014) “Poverty and Inequality during the Great Recession in Greece“. Political Studies Review, 12: 209–223.