product (GDP) in current and constant dollars of many countries during times of recession and recovery. We then argue that … small shocks, including those which do not lead to a recession; we also discuss its predictive power. Finally, a two …-sector toy model of recession and recovery illustrates how the severity and length of recession depends on the dynamics of …

money demand falls, while a positive goods productivity shock raises temporary output and velocity. The paper explains such … important for velocity during less stable times and the goods productivity shock more important during stable times …