TY - JOUR
T1 - The post-crisis slump in Europe
T2 - A business cycle accounting analysis
AU - Gerth, Florian
AU - Otsu, Keisuke
N1 - Publisher Copyright:
© 2018 Walter de Gruyter GmbH, Berlin/Boston 2018.
PY - 2018/1/26
Y1 - 2018/1/26
N2 - This paper analyzes the post-crisis slump in 30 European economies during the 2008Q1-2014Q4 period using the business cycle accounting (BCA) method à la [Chari, V. V., P. Kehoe, and E. McGrattan. 2007. "Business Cycle Accounting." Econometrica 75 (3): 781-836]. We find that the deterioration in the efficiency wedge is the most important driver of the European Great Recession and that this adverse shock persists throughout our sample. Moreover, we find that countries with higher growth in nonperforming loans feature a smaller decline in efficiency wedges. These findings support the emerging literature on resource misallocation triggered by financial crises.
AB - This paper analyzes the post-crisis slump in 30 European economies during the 2008Q1-2014Q4 period using the business cycle accounting (BCA) method à la [Chari, V. V., P. Kehoe, and E. McGrattan. 2007. "Business Cycle Accounting." Econometrica 75 (3): 781-836]. We find that the deterioration in the efficiency wedge is the most important driver of the European Great Recession and that this adverse shock persists throughout our sample. Moreover, we find that countries with higher growth in nonperforming loans feature a smaller decline in efficiency wedges. These findings support the emerging literature on resource misallocation triggered by financial crises.
KW - European economy
KW - Great Recession
KW - business cycle accounting
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U2 - 10.1515/bejm-2016-0189
DO - 10.1515/bejm-2016-0189
M3 - Article
AN - SCOPUS:85041013366
VL - 18
JO - B.E. Journal of Macroeconomics
JF - B.E. Journal of Macroeconomics
SN - 1935-1690
IS - 1
M1 - 20160189
ER -