Long-Term Damage from the Great Recession in OECD Countries
By Laurence Ball. 2014
437 citations recorded by the source corpus.
This paper estimates the long-term effects of the global recession of 2008–2009 on output in 23 countries. I measure these effects by comparing current estimates of potential output from the OECD and IMF to the path that potential was following in 2007, according to estimates at the time. The losses in potential output range from almost nothing in Australia and Switzerland to more than 30 percent in Greece, Hungary, and Ireland; the average loss, weighted by economy size, is 8.4 percent. Most countries have experienced strong hysteresis effects: shortfalls of actual output from pre-recession trends have reduced potential output almost one-for-one. In the hardest-hit economies, the current growth rate of potential is depressed, implying that the extent of lost potential is growing over time.
Subfields: Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/500d61fde004aff96c2bf28405654c7c32ee9b79
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In Political Science and International Relations
- Giuseppe Berlingieri
- Patrice Ollivaud
- D. Turner
- Olivier J. Blanchard
- Lawrence H. Summers
- Chiara Criscuolo
- C. Borio
- Patrick Blanchenay
Citations in the corpus
- The Impact of Covid-19 on Productivity (2020, neutral): “In contrast, Ball (2014) shows that the recession of 2008-9 had persistent negative effects on output among a sample of 23 OECD countries, and Cerra and Saxena (2008) show that output does not return to trend following recessions in a broader sample of countries and time periods.”
- The Effect of the Global Financial Crisis on OECD Potential Output (2015, positive): “However, a more recent study by Ball (2014) is also considered because it does focus on the recent financial crisis and is also similar to the current paper in using OECD estimates of potential output to evaluate the medium-term output losses from the crisis. The papers by Cerra and Saxena (2008) an”
- Inflation and Activity - Two Explorations and Their Monetary Policy Implications (2015, background): “While, in 1985, the coefficient tθ was significant for all but two countries, in 2014 it is insignificant for all but four countries.16 B. Empirical Estimations of Phillips Curves: A Simpler Approach Our discussant at the 2015 ECB Forum on Central Banking, Laurence Ball, however, expressed skepticis”
- The Multiprod project: A comprehensive overview (2017, background): “In addition, Ball (2014) finds that the recession resulted in an average loss of potential output of 8.”
- Monetary Policy, the Financial Cycle and Ultralow Interest Rates (2016, background): “Ball (2014) finds that potential output in the United States dropped by 5.3% after the most recent crisis.”