The slow recovery following the 2008/2009 recession has led to renewed interest in the question whether deep recessions lower real GDP permanently or whether we can expect a rebound to earlier trend levels. Using a recent quantile autoregression unit root test we check whether shocks to real GDP...

Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as 'hysteresis,' argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and...

This paper takes stock of the global economic recovery a decade after the 2008 financial crisis. Output losses after the crisis appear to be persistent, irrespective of whether a country suffered a banking crisis in 2007-08. Sluggish investment was a key channel through which these losses...

Using panel data for a large number of countries, we find that economic contractions are not followed by offsetting fast recoveries. Trend output lost is not regained, on average. Wars, crises, and other negative shocks lead to absolute divergence and lower long-run growth, whereas we find...

An endogenous growth model with financial intermediation demonstrates how deposit insurance and prudential regulatory forbearance lead to banking crises and growth declines. The model assumptions are based on features of the Japanese financial system and regulation. The model demonstrates how...

Covid-19 has exacerbated economic and social vulnerabilities across Sub-Saharan Africa (SSA). There is a risk that growth could be lower for longer, with a setback to development. Post-pandemic reforms thus become even more important, especially with constrained scope for fiscal and monetary...

In 2015, the EU regional / cohesion policy has passed its 40th anniversary. During this time, it has undergone various manifestations with ever-changing objectives. It started as a mixture of structural and regional policy aimed at reducing regional economic disparities within the Union. Since...

The paper elaborates on the employment intensity of growth. Previous evidence regarding this question is surveyed. Empirical results concerning Europe and selected other industrial countries reveal that the cyclical link between unemployment and growth is still stable in the nineties. However,...

This paper evaluates the performance of two alternative policy rules, a forward-looking rule and a spontaneous adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union data. The simulations suggest that forward-looking rules...

During the ongoing financial crisis the analysis of similar historical crises has gained more and more attention among economic researchers and forecasters. Existing studies, however, do not tackle the immense heterogeneity that is present in cross-country samples in a formal and consistent way....