Presents the empirical data of business cycles and the theories that economists have developed to explain and prevent them, and considers case studies of recessions and depressions in the United States and internationally.

We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about eight years to reach the pre-crisis level of income; the median is about 6 1⁄2 years. Five to six years...