Working Paper

A Note on Banking and Housing Crises and the Strength of Recoveries

Authors

  • Jens Boysen-Hogrefe
  • Nils Jannsen
  • Carsten-Patrick Meier
Publication Date

We investigate whether recoveries following normal recessions differ from recoveries following recessions that are associated with either banking crises or housing crises. Using a parametric panel framework that allows for a bounce-back in the level of output during the recovery, we find that normal recessions are followed by strong recoveries in advanced economies. This bounce-back is absent following recessions associated with banking crises and housing crises. Consequently, the permanent output losses of recessions associated with banking crises and housing crises are considerably larger than those of normal recessions.

Info

JEL Classification
C33, E32

Key Words

  • Banking Crisis
  • business cycle
  • Housing Crisis
  • recovery