In this dissertation, I analyze the business cycle effects of severe economic crises, such as financial crises or housing crises. The dissertation is a collection of five papers. It contributes to the empirical literature on the effects of severe economic crises. It has a special focus on the business cycle effects and possible international spillover effects of housing crises. Moreover, it analyzes the economic conditions under which housing crises are particularly costly. It proposes a method of dealing with the problem of heterogeneity that frequently occurs when the effects of severe economic crises are analyzed. Finally, it analyzes the strength of recoveries following recessions associated with severe economic recessions compared to ordinary recessions. The results found are particularly relevant for economic policy and macroeconomic forecasting, and in some cases they also may serve as the empirical foundation for theoretical business cycle models.