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IntroductionThe study of crisis events provides important lessons to prepare for upcoming events. The Great Recession’s impact on perinatal health in Europe can provide relevant insights into the healthcare and social protection systems’ response to the protection of the health of the most vulnerable groups.ObjectiveTo assess time trends and international disparities in perinatal mortality rates (PMR) and infant mortality rates (IMR), following the Great Recession, and their association with socioeconomic indicators in Portugal, Greece, Italy and Spain.MethodsAssociations were assessed through generalised linear models for all four countries. A Poisson joinpoint regression model was applied to explore PMR and IMR trend changes between 2000 and 2018. Country disparities were analysed using mixed-effects multilevel models.ResultsIMR and PMR have decreased overall in the four selected countries between 2000 and 2018. Still, whereas in Spain, Italy and Portugal the decreasing pace was attenuated after 2009, in Greece a positive trend was found after the 2008 crisis. IMR and PMR were significantly associated with socioeconomic indicators in all four countries. National disparities in the evolution of IMR and PMR were significantly associated with most socioeconomic indicators between 2000 and 2018.ConclusionOur results confirm the impact of the Great Recession on PMR and IMR trends in all four countries, taking recurring associations between macroeconomic cycles, variations in mortality trends, macroeconomic volatility and stagnation of IMR and PMR into account. The association with socioeconomic indicators stresses the need to strengthen social protection and healthcare systems to better protect the population’s health from the earliest days.

We study entry into entrepreneurship during the COVID-19 recession of 2020 using new data from an extensive survey of more than 24,000 Spanish households, conducted between June and November 2020. We find that while the overall decline in the startup rate in 2020 was large, and of a similar magnitude as that during the Great Recession, the differential impact depending on ex ante income was starkly different. During 2020, the drop in firm entry was entirely concentrated among low- and medium-income households. We show that the entrepreneurship gap between these households and their high-income counterparts is not directly explained by social distancing, since it is mostly driven by the sectors not directly affected by lockdown measures, and it is larger among households that did not suffer a negative income shock during the pandemic. Our results instead indicate that high-income households performed relatively better during the COVID-19 recession because they had the means to exploit new business opportunities, thanks to their larger wealth and better access to external finance. The views expressed in this paper are those of the authors and do not necessarily represent the views of Banco de España or the Eurosystem. Andrea Caggese acknowledges financing from the Plan Estatal de Investigación Científica y Técnica y de Innovación 2017–2020, project number PID2020-116268GB-I00, and from the Spanish Agencia Estatal de Investigación (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-00915-S).

This paper evaluates empirically the effect of financial crises on several types of pollutant emissions. We focus on a sample of 55 developing countries from 1980 until 2012 and rely on the local projection method to plot impulse response functions. Our results show that financial crises lead to a fall in CO2 emissions. Moreover, systemic crises increase consumption-based emissions, which suggests that this type of crises encourages the consumption of goods with an inferior environmental quality. A country hit by a sovereign debt crisis, experiences an increase in emissions stemming from energy related activities or industrial processes. During bad times, financial crises positively affect both methane and nitrous oxide emissions. Finally, in countries under fiscal retrenchment, a financial crisis leads to a negative response of CO2 emissions. authorsversion published

This study uses aggregate panel data on French départements to investigate the relationship between macroeconomic conditions and mortality from 1982 to 2014. We find no consistent relationship between macroeconomic conditions and all-cause mortality in France. The results are robust across different specifications, over time, and across different geographic levels. However, we find that heterogeneity across age groups and mortality causes matters. Furthermore, in areas with a low average educational level, a large population, and a high share of migrants, mortality is significantly countercyclical. Similar to the case in the United States, the relationship between the unemployment rate and mortality seems to have moved from slightly procyclical to slightly countercyclical over the period of analysis.

Aims: The so-called “Great Recession” in Europe triggered widespread concerns about population health, as reflected by an upsurge in empirical research on the health impacts of the economic crisis. A growing body of empirical studies has also been devoted to socioeconomic inequalities in health during the Great Recession. The aim of the current study is to summarise this health inequality literature by means of a scoping review. Methods: We have performed a scoping review of the research literature (English language) published in the years 2012—2017. Only empirical papers with (1) health status measured on the individual level, (2) information on socioeconomic position (i.e. employment status, educational level, income/wealth, and/or occupational class), and (3) data from European countries in both pre- and post-crisis years were considered relevant. In total, 49 empirical studies fulfilled these inclusion criteria. Results: The empirical findings in the 49 included studies predominantly show that socioeconomic inequalities in health either increased or remained stable from pre- to post-crisis years. Two-thirds (65 percent) of the studies found evidence of either increasing or partially increasing health inequalities. Thus, people in lower socioeconomic strata fared worse overall in terms of health during the Great Recession, compared to people with higher socioeconomic status. Conclusions: The Great Recession in Europe tends to be followed by increasing socioeconomic inequalities in health. Policymakers should take note of this finding. Widening socioeconomic inequalities in health is a major cause of concern, in particular if health deterioration among ‘vulnerable groups’ is caused by accelerating cumulative disadvantages. The present literature review is a part of the project “Health Inequalities, Economic Crisis, and the Welfare State”, funded by the Research Council of Norway [grant number 221037].

In the last couple of decades, there has been a lot of interest on the impact of macroeconomic fluctuations on health and mortality rates. Many studies, for different countries, find that mortality is procyclical. However, studies examining the effects of more recent recessions are less conclusive, finding mortality to be less procyclical, or even countercyclical. In this paper, using data of Spanish provinces from 1999 to 2016, we investigate how this relationship works in the context of a country that is subject to extreme business cycle fluctuations. Furthermore, we analyze the impact of unemployment for different mortality causes and we explore differences by sex, age group and level of education. In general terms, we find mortality to be procyclical so that when the economy is in a recession, mortality falls. When exploring mortality causes, we show that deaths from cardiovascular disease, cancer, senility, transport accidents and homicides are procyclical. By sex, we find procyclicality for both men and women. By age, mortality is procyclical for all age groups; however, the causes of death that result in this procyclical behavior are specific to each age group. By educational level, suicide appears as a countercyclical cause for individuals with intermediate levels of education.

There has been much recent interest in the ‘resilience’ of cities (and regions) to shocks of various kinds. Studies have found, for example, that cities (and regions) appear to have different degrees of resistance to and recoverability from economic shocks, such as major recessions.1–3 In this paper we explore whether and to what extent the clustered personality traits of a city’s population, as measured by the so-called ‘Big Five’ traits, might be relevant to explaining these differences. The paper utilises the personality scores of more than 400,000 UK residents across some 63 cities to examine how far variations in these scores help to account for differences in how those cities have reacted to major recessions. We find that for the three recessionary shocks in our sample period, the trait openness (to experience) has a strong significant relationship with city resilience. Cities with a higher degree of openness to experience turn out to be more resilient to UK-wide recessionary shocks. These results also hold when account is taken for the age and location of birth of a city’s residents. We also briefly discuss potential policy implications.

The rise in globalization coupled with the exponential growth in technology has placed greater emphasis on a skills-based economy. This in turn has increased the demand for a labor force with advanced post-baccalaureate education. In order to better devise strategies and/or enact laws to promote, support and enhance post-baccalaureate education, it is imperative to understand the forces that drive or hinder individuals’ post-baccalaureate aspirations. Using PowerStats, an on-line analytical tool made available from the National Center for Education Statistics, I use data from the 2008/12 Baccalaureate and Beyond Longitudinal Study to develop a linear probability model of graduate enrollment incorporating variables informed by the research on human, social, and cultural capital as well as habitus. The results indicate that GPA, type of undergraduate institution attended, and expectation of post-baccalaureate credentials are statistically significant and positively associated with Master’s degree enrollment three years after earning a Bachelor’s degree. Older students and those with higher incomes, meanwhile, were found to have statistically significantly lower probability of graduate enrollment. Many of the variables previously used by researchers as proxies for social and cultural capital did not have a statistically significant effect in this model specification. This finding suggests that these measures may have been confounded by acting through other variables (interdependencies) in the model. This underscores the difficulty in assigning appropriate, direct and independent measures that capture the intended underlying effects proposed in Bourdieu’s theories. Additional research is needed in this area to better understand the influences that different groups experience in their pursuit of post-baccalaureate education. This dissertation also examines the impact of business cycle fluctuations on graduate enrollment over a thirty-year period, encompassing three major economic downturns, using a fixed effects approach. Using IPEDS enrollment data and national unemployment rates as a proxy for the business cycle between 1988 and 2017, I find graduate enrollment to be counter cyclical. Additionally, the expansion of Grad PLUS loans eased the credit constraint on graduate borrowing and seems to have had a significant and positive effect on graduate enrollment, regardless of the business cycle. While the expansion of Grad PLUS loans had a positive effect overall, there are racial differences that could suggest other barriers or constraints to graduate enrollment for minority groups during economic downturns.

We present real time survey evidence from the UK, US and Germany showing that the labor market impacts of COVID-19 differ considerably across countries. Employees in Germany, which has a well-established short-time work scheme, are substantially less likely to be affected by the crisis. Within countries, the impacts are highly unequal and exacerbate existing inequalities. Workers in alternative work arrangements and in occupations in which only a small share of tasks can be done from home are more likely to have reduced their hours, lost their jobs and suffered falls in earnings. Less educated workers and women are more affected by the crisis.

The theoretical literature that neglects the benefits of stabilization policies (e.g., Lucas 1987, 2003) ultimately relies on the low impact of macroeconomic volatility on aggregate income and consumption. We argue that this conclusion is theoretically and empirically weak. Theoretically, the cost of volatility should be measured by including not only monetary magnitudes, but also those psychological costs whose relevance has been stressed by behavioural economics and that are correlated with the number of unemployment episodes. We refer here to implications for the experienced utility of loss aversion, the endowment effect and hedonic adaptation. Empirically, downturns more severely affect those who have less and who suffer greater well-being losses from each shock, magnifying the negative impact of recessions. It follows that the traditional analysis, which disregards the main causes of well-being losses determined by downturns, cannot represent a sound basis for dismissing policies aimed at preventing downturns (and/or their impact on the labour market).

We model US post-WWII monthly data with a Smooth Transition VAR model and study the effects of an unanticipated increase in economic policy uncertainty on unemployment in recessions and expansions. We find the response of unemployment to be statistically and economically larger in recessions. A state-contingent forecast error variance decomposition analysis confirms that the contribution of EPU shocks to the volatility of unemployment at business cycle frequencies is markedly larger in recessions.

Aim: Concurrently with increasingly permissive attitudes towards marijuana use and its legalization, the prevalence of marijuana use has increased in recent years in the U.S. Substance use is generally more prevalent in men than women, although for alcohol, the gender gap is narrowing. However, information is lacking on whether time trends in marijuana use differ by gender, or whether socioeconomic status in the context of the Great Recession may affect these changes. Methods: Using repeated cross-sectional data from the National Survey on Drug Use and Health (2002–2014), we examined changes over time in prevalence of past-year marijuana use by gender, and whether gender differences varied across income levels. After empirically determining a change point in use in 2007, we used logistic regression to test interaction terms including time, gender, and income level. Results: Prevalence of marijuana use increased for both men (+4.0%) and women (+2.7%) from 2002 to 2014, with all of the increase occurring from 2007 to 2014. Increases were greater for men, leading to a widening of the gender gap over time (p < 0.001). This divergence occurred primarily due to increased prevalence among men in the lowest income level (+6.2%) from 2007 to 2014. Conclusion: Our findings are consistent with other studies documenting increased substance use during times of economic insecurity, especially among men. Corresponding with the Great Recession and lower employment rate beginning in 2007, low-income men showed the greatest increases in marijuana use during this period, leading to a widening of the gender gap in prevalence of marijuana use over time.

The recent COVID-19 crisis has generated a concern that productivity (which was already at historically low levels) may further decline. From a theoretical standpoint, the recessions-total factor productivity (TFP) nexus is ambiguous à priori. This paper empirically examines the dynamic impact of recessions on TFP. We compute a new measure of utilization-adjusted productivity from a sample of 24 industries in 18 advanced economies between 1970 and 2014. Resorting to the local projection method we trace out the dynamic short to medium-term impact of such recessionary shocks. We find that deep recessions lead to a permanent deterioration in the level of total factor productivity. This effect is driven by the increase in resource misallocation across different sectors., Highlights • COVID-19 has generated concern that productivity may further decline. • This paper examines the dynamic impact of recessions on productivity. • The local projection method is used on a sample of 18 advanced economies. • We find that recessions permanently lower the level of productivity. • The effect is driven by the increase in resource misallocation across sectors.

During the recent U.S. financial crisis, the large decline in economic activity and credit was accompanied by a large increase in the dispersion of growth rates across firms. However, even though aggregate labor and output fell sharply during this period, labor productivity did not. These features motivate us to build a model in which increased volatility at the firm level generates a downturn but has little effect on labor productivity. In the model, hiring inputs is risky because financial frictions limit firms' ability to insure against shocks that occur between the time of production and the receipt of revenues. Hence, an increase in idiosyncratic volatility induces firms to reduce their inputs to reduce such risk. We find that our model can generate about 67% of the decline in output of the Great Recession of 2007–2009.

This paper unveils a new resource for macroeconomic research: a long-run dataset covering disaggregated bank credit for 17 advanced economies since 1870. The new data show that the share of mortgages on banks’ balance sheets doubled in the course of the twentieth century, driven by a sharp rise of mortgage lending to households. Household debt to asset ratios have risen substantially in many countries. Financial stability risks have been increasingly linked to real estate lending booms, which are typically followed by deeper recessions and slower recoveries. Housing finance has come to play a central role in the modern macroeconomy.

A well-established result in the literature is that Social Security tends to reduce steady state welfare in a standard life cycle model. However, less is known about the historical effects of the program on agents who were alive when the program was adopted. In a computational life cycle model that simulates the Great Depression and the enactment of Social Security, this paper quantifies the welfare effects of the program's enactment on the cohorts of agents who experienced it. In contrast to the standard steady state results, we find that the adoption of the original Social Security tended to improve these cohorts' welfare. In particular, we estimate that the original program benefited households alive at the time of the program's adoption with a likelihood of over 80 percent, and increased these agents' welfare by the equivalent of 5.9% of their expected future lifetime consumption. The welfare benefit was particularly large for poorer agents and agents who were near retirement age when the program was enacted. Through a series of counterfactual experiments we demonstrate that the difference between the steady state and transitional welfare effects is primarily driven by a slower adoption of payroll taxes and a quicker adoption of benefit payments during the program's phase-in. Overall, the opposite welfare effects experienced by agents in the steady state versus agents who experienced the program's adoption might offer one explanation for why a program that potentially reduces welfare in the steady state was originally adopted.

We use job vacancy data collected in real time by Burning Glass Technologies, as well as unemployment insurance (UI) initial claims and the more traditional Bureau of Labor Statistics (BLS) employment data to study the impact of COVID-19 on the labor market. Our job vacancy data allow us to track the economy at disaggregated geography and by detailed occupation and industry. We find that job vacancies collapsed in the second half of March. By late April, they had fallen by over 40%. To a first approximation, this collapse was broad based, hitting all U.S. states, regardless of the timing of stay-at-home policies. UI claims and BLS employment data also largely match these patterns. Nearly all industries and occupations saw contraction in postings and spikes in UI claims, with little difference depending on whether they are deemed essential and whether they have work-from-home capability. Essential retail, the "front line" job most in-demand during the current crisis, took a much smaller hit, while leisure and hospitality services and non-essential retail saw the biggest collapses. This set of facts suggests the economic collapse was not caused solely by the stay-at-home orders, and is therefore unlikely to be undone simply by lifting them.

In this paper we present a study of the predictive ability of the term structure of interest rates over future recessions in Portugal. The analysis will be based on factor models in which the term structure of interest rates is determined by latent factors, corresponding to their level, slope and curvature. Simple and modified probit and logit models will be used to examine the forecasting ability of term structure in predicting economic crises (recessions). Recession periods were determined based on the methodology proposed by Bry and Boschan. Our results suggest that all term structure of interest rates components allow to predict recessions in one-year time horizons, with an increase in adjustment quality when we include an autoregressive term as the explanatory variable.

This paper examines the association between the Great Recession and real assets among families with young children. Real assets such as homes and cars are key indicators of economic well-being that may be especially valuable to low-income families. Using longitudinal data from the Fragile Families and Child Wellbeing Study (N = 4,898), we investigate the association between the city unemployment rate and home and car ownership and how the relationship varies by family structure (married, cohabiting, and single parents) and by race/ethnicity (White, Black, and Hispanic mothers). Using mother fixed-effects models, we find that a one percentage point increase in the unemployment rate is associated with a -0.5 percentage point decline in the probability of home ownership and a -0.7 percentage point decline in the probability of car ownership. We also find that the recession was associated with lower levels of home ownership for cohabiting families and for Hispanic families, as well as lower car ownership among single mothers and among Black mothers, whereas no change was observed among married families or White households. Considering that homes and cars are the most important assets among middle and low-income households in the U.S., these results suggest that the rise in the unemployment rate during the Great Recession may have increased household asset inequality across family structures and race/ethnicities, limiting economic mobility, and exacerbating the cycle of poverty.

The state of Espírito Santo has short-term fluctuations in its activity level ("business cycles") that are on average twice more volatile than fluctuations occurring in Brazil. In addition, there are differences in terms of duration between cycles occurring in the state and country. Because of this, the objective of this work is to build a monthly chronology of recessions for the Espírito Santo over the period between January 1991 and March 2012. In terms of means durations it was found that over the period analyzed the Espírito Santo went through a larger number of recessions than Brazil. On the other hand, in terms of median durations, it was noted that recessions tend to last less in the state than in the country, despite its greater relat ive volatility. Together, these results provide the first empirical characterization of the recessions that occurred in the state in the last 20 years as well as a comparison with the national context.

This study tried to determine whether systematic changes have taken place in the size (amplitude) and duration (length) of business cycle phases in industrial countries over the past half century and to analyze, by using two parametric duration models, mainly, Gompertz and Weibull models, the possible effects of some macroeconomic variables, such as labor productivity growth, inflation, real interest rate, openness, oil prices, and gross saving rate, on the duration of the contraction phases of business cycles. The reference turning point chronology elaborated by the OECD for 23 industrial countries for the post-1956 period was used. The sample included 258 expansions and 267 contraction spells. The widespread belief that the length of expansions has, on average, become longer and that of contractions has become shorter over time was not supported in our sample. There is sufficient evidence of monotonically increasing hazard rates for both contraction and expansion durations; i.e., the spells are positively duration-dependent. Regarding the impacts of covariates on the hazard rate of contractions, the saving rate, openness, productivity growth, and size (depth) were found to have significant positive impacts, whereas the real interest rates have a negative effect. Inflation, oil prices, and length of previous expansion period have no significant impact on contraction durations. Key words: Survival analysis, Duration models, Business cycles, Recessions, Industrial countries, Factors driving business cycles.JEL: C41, E32, F44.

Business cycles show the ups and downs of the national production and can have a great impact on macroeconomic variables. That is why predicting business cycles in macroeconomic is of great importance. Since the main goal of economists is to provide the ground for economic stabilization and to prevent economic fluctuations and instabilities, knowing that the economy has entered a period of economic expansion or recession can be efficient in determining effective economic policies. In this research, using statistical data during 1974-2014 and decision making tree, we tried to forecast the next recessions in Iran. The results show that, among the indicators used, momentum imports, revenue from oil exports, unexpected momentum inflation, real total import, and inflation are more effective in recession forecast. Also, the results indicate that BRT can be a useful technique for analyzing economic policy.

"Published online: 15 Aug. 2014", Using a panel of developed and developing countries and data for the period 1980 to 2005, we find that debt crises trigger financial reforms.We also show that (i) when general economic conditions deteriorate, financial reforms become more likely to take place; (ii) IMF-stabilization programmes and sovereign debt restructurings favour the implementation of financial reforms; and (iii) the quality of economic institutions strongly boosts financial reforms., COMPETE, QREN, FEDER, Fundação para a Ciência e a Tecnologia (FCT)

During the Great Recession and its aftermath, state and local governments’ revenue streams dried up due to diminished taxes. Budget cuts affected many aspects of government; in this paper, we investigate whether (and how) local school districts modified their funding and taxing decisions in response to changes in state aid in the post-recession period. Using detailed district-level panel data from New York and a fixed effects as well as an instrumental variables strategy, we find strong evidence that school districts did indeed respond to state aid cuts in the post-recession period by countering the cuts. In comparison with the pre-recession period, a unit decrease in state aid was associated with a relative increase in local funding per pupil. To further probe the school district role, we explore whether the property tax rate, which districts set each year in response to budgetary needs, also responded to state aid cuts. Indeed, we find that relative to the pre-recession period, the post-recession period was characterized by a strong negative relationship between the property tax rate and state aid per pupil. In other words, after the recession a unit decrease in state aid was associated with a relative increase in the property tax rate in the post-recession period (in comparison with the pre-recession period).

This paper outlines a synthesis of ecological economics with econophysics and other complexity approaches to economics. Arguably, the resulting “ecological econophysics” will be scientifically sounder than mainstream economics and much better suited to addressing a major challenge of our times: the development of democratically-based policies to reduce economic throughput to an environmentally sustainable level without triggering economic crises and without excluding part of the world’s population, i.e., to implement degrowth. Degrowth will need major structural changes, which leads us to question whether there are limits to the malleability of the economic system’s architecture. A fundamental limit will be encountered if, as suggested by the physics of complexity, long-lasting complex systems always occur midway between an ordered and a disordered state. There is much evidence that this hypothesis holds and that the current economic system satisfies this condition. However, this does not mean that the problems posed by this system should be unavoidable. Ecological econophysics gives clues to identifying alternative economic systems that would also function between order and chaos, but which would have radically different implications for environmental sustainability and social justice.

Background Life expectancy increased in industrialized countries, but inequalities in health and mortality by socioeconomic position (SEP) still persist. Several studies have documented educational inequalities, yet the association between health and employment status remains unclear. However, this is an important issue considering the instability of the labour market and the fact that unemployment now also touches ‘non-traditional groups’ (e.g. the high-educated). This study will 1) probe into the association between unemployment and cause-specific mortality; 2) look into the possible protective effect of sociodemographic variables; 3) assess the association between unemployment, SEP, gender and cause-specific mortality. Material and methods Individually linked data of the Belgian census (2001) and Register data on emigration and cause-specific mortality during 2001–2011 are used. The study population contains the Belgian population eligible for employment at census, based on age (25–59 years) and being in good health. Both absolute and relative measures of all-cause and cause-specific mortality by employment status have been calculated, stratified by gender and adjusted for sociodemographic and socioeconomic indicators. Results Unemployed men and women were at a higher risk for all-cause and cause-specific mortality compared with their employed counterparts. The excess mortality among unemployed Belgians was particularly high for endocrine and digestive diseases, mental disorders, and falls, and more pronounced among men than among women. Other indicators of SEP did only slightly decrease the mortality disadvantage of being unemployed. Discussion The findings stress the need for actions to ameliorate the health status of unemployed people, especially for the most vulnerable groups in society., SCOPUS: ar.j, info:eu-repo/semantics/published

We document information rigidity in forecasts of real GDP growth in 46 countries over the past two decades. We also investigate: (i) whether rigidities differ across countries, particularly between advanced countries and emerging markets; (ii) whether rigidities are lower around turning points in the economy, such as in times of recessions and crises; and (iii) how quickly forecasters incorporate news about growth in other countries into their growth forecasts, with a focus on the way in which advanced countries’ growth forecasts incorporate news about emerging market growth, and vice versa.

ResumenEl objetivo de este documento es medir la magnitud y analizar las causas de la caída e incremento de la producción y del empleo sectoriales de México y del Estado de México durante el ciclo económico internacional en curso. Nuestros resultados principales son: 1) el comercio exterior ha desempeñado un papel central en la caída y recuperación del empleo y la producción a lo largo del ciclo completo, en tanto que la inversión extranjera directa y las remesas solamente han sido determinantes en la fase recesiva; 2) las fluctuaciones de la producción industrial y manufacturera son mayores que las del sector servicios y todas ellas superan a las del empleo; 3) ha habido una recomposición del empleo a favor del eventual, especialmente en el sector terciario, incluso durante la expansión.AbstractThe objective of this text is to measure the magnitude and analyze the causes of the drop and increase in sector production and employment in Mexico and the State of Mexico during the current international economic cycle. Our main results are as follows: 1) foreign trade has played a central role in the drop and recovery in employment and production throughout the entire cycle, while foreign direct investment and remittances have only been determining factors in the recessive phase; 2) the fluctuations in industrial and manufacturing production are greater than those of the service sector, and all three are greater than those of employment; 3) there has been a reorganization of employment in favor of temporary jobs, especially in the tertiary sector, even during times of expansion.

This paper outlines a long-term policy and institutional framework for reducing the intensity of recessions, debt crises and financial instabilities, especially for the Core nations and areas that bore the brunt of the anomalies during 2008-2013. We argue that institutional changes need to be systemic, amounting to the construction of a new social structure of accumulation (SSA) or mode of regulation (MOR), which we call an SSA of embedded communitarian liberalism. Five institutional spheres are introduced which are in need of systemic change, due to the entrenched contradictions and problems which the current set of institutions generate. These involve firstly institutions within the world-system of finance and production; secondly relating to finance versus industry; thirdly capital versus labor; fourthly state systems of production; and fifthly the interlinking of state, community and ecology.

This paper provides clear cut evidence that recessionary and financial distressed conditions, as well as banning foreclosure laws, often introduced by governments to mitigate the effects of the economic and/or financial distressed conditions on mortgage loans, have adverse effects on the loan default probability. We argue that this may be attributed to long-term persistency of the above conditions, which can cause abrupt shifts in the probability of default of a loan. Our estimates indicate that these policies may also raise moral hazard incentives that borrowers will not maintain their payments in long run, even for loans with low LTV. Under these conditions, efforts of banks to restructure (or refinance) mortgage loans may not successfully affect future default probabilities. Our evidence is based on an extension of the discrete-time survival analysis model which allows for a structural break in its hazard rate function due to abrupt changes to exogenous events, like changes in political conditions. It is also robust to alternative specifications of the binary link function between default events and covariates. Asymmetric link functions are found to be more appropriate under financial distressed conditions. ABSTRACT FROM AUTHOR] Copyright of Proceedings: Ioannina Meeting on Applied Economics & Finance is the property of University of Ioannina, Department of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) 159 159 159-159

The Great Recession brought an end to a 20-year expansion of consumer debt. In its wake is a lively debate about what caused the turnaround. Was it motivated by a decreased appetite for debt by consumers or an unwillingness to lend by banks? Our analysis of Equifax and Mail Monitor data shows that the major cause was most likely consumers.

In 1962, Arthur Okun posited an empirical relationship between the change in the unemployment rate and real output growth. Since then, the media, policymakers, pundits, and intermediate macro students have used the so-called Okun’s law as a rule of thumb to relate changes in unemployment to changes in output growth. However, some studies have suggested that the relationship has not been stable over time. Furthermore, the slow recovery of U.S. unemployment relative to output after the Great Recession has led some to question whether Okun’s law has changed permanently. In this light, the authors reconsider the evidence on instability in Okun’s law and, in particular, examine whether the Great Recession has contributed to the breakdown of the empirical relationship. (JEL C22, E32)

Economists have been arguing about the connection between unemployment and inflation for decades. Critics claim that the connection is unreliable and leads policymakers astray, while others argue that the relationship is useful for forecasting. We examine the more direct connections between elevated unemployment levels and the rate of increase in wage and labor costs, more generally. We find that wage and labor cost growth has declined markedly following recent recessions. It has again declined sharply in the most recent recession. We also find that compensation typically remains subdued during the initial phases of recent recoveries. This is again the case in the current recovery, making labor costs a significant restraining force on inflation going forward.

The past recession has hit the labor market especially hard, and economists are wondering whether some fundamentals of the market have changed because of that blow. Many are suggesting that the natural rate of long-term unemployment— the level of unemployment an economy can’t go below—-has shifted permanently higher. We use a new measure that is based on the rates at which workers are finding and losing jobs and which provides a more accurate assessment of the natural rate. We find that the natural rate of unemployment has indeed shifted higher—but much less so than has been suggested. Surprising trends in both the job-finding and job-separation rates explain much about the current state of the unemployment rate.

Recent research has documented that the Federal Reserve produces systematic errors in forecasting inflation, real GDP growth, and the unemployment rate, even though these forecasts are unbiased. We show that these systematic errors reveal that the Fed is “surprised” by real and inflationary cycles. Using a modified Mincer-Zarnowitz regression, we show that the Fed knows the state of the economy for the current quarter, but cannot predict it one quarter ahead. We further show that even allowing for an asymmetric loss function the Fed does not appear to know the state of the economy one quarter ahead.

This paper quantitatively analyzes the economic resilience of resource-based cities (RBCs) in Northeast China in terms of resistance and recoverability during two economic crises: the Asian financial crisis and the global financial crisis. Moreover, it analyzes the main factors that affected regional resilience. There are three main findings. First, the RBCs in general demonstrated poor resistance during both recessions, but there were variations among the different types of RBCs. Petroleum and metal cities demonstrated the most resistance, whereas coal cities performed the worst. Second, the influential factors affecting economic resilience varied across the two economic cycles, but location advantage, research and development (R and D) intensity, foreign trade dependence ratio, and supporting policies had positive effects on resilience during both economic cycles, while the proportion of employed persons in resource industries had a negative effect. Industrial diversity had a weak and ambiguous effect on resilience. Third, the secondary industry was more resilient during the Asian financial crisis, but the tertiary industry was more resilient during the global financial crisis. This shift may be attributed to both the nature of the crises and the strength of the sectors at the time of the crises.

We provide a comprehensive empirical characterization of the linkages between key macroeconomic and financial variables around business and financial cycles, for 21 OECD countries over the period 1960–2007. In particular, we analyse the implications of 122 recessions, 113 (28) credit contraction (crunch) episodes, 114 (28) episodes of house price declines (busts), 245 (61) episodes of equity price declines (busts), and their various overlaps in these countries, over the sample period. Our results indicate that the interactions between macroeconomic and financial variables can play a major role in determining the severity and duration of a recession. Specifically, we find evidence that recessions associated with credit crunches and house price busts tend to be deeper and longer than other recessions. — Stijn Claessens, M. Ayhan Kose and Marco E. Terrones

Major views about the business cycle are tested by using NIPA data of the US economy for the years 1929-2013. Direct acyclic graphs (DAGs) are used for identification purposes, i.e., as tool to elucidate causal issues. Re-sults show that (a) investment is not autonomous, as it is stimulated by profits and consumption, and damped by government spending; (b) profits are reduced by past investment; (c) both business investment and profits have negative effects on government spending which consequently appears as an endogenous rather than as an exogenous variable. Regularities identified in the data are sufficient to generate the cycle. Considering the results, the “regularity” of the business cycle, and the fact that after growing between 2008 and 2012, profits stagnated in 2013 and declined in 2014, it can be concluded with reasonable confidence that a recession will occur in the next few years.

Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a lead set by a fast-growing empirical literature. Recent long-run historical work has uncovered a range of important stylized facts concerning financial instability and the role of credit in advanced economies, and this article provides an overview of the key findings.

Background Previous research suggests that the health effects of recessions are mixed and vary spatially between countries. Using the North-South English health divide as an example, this paper examines whether there are also spatial variations within countries. Methods Cross-sectional data on self-reported ‘not good health’ was obtained from the British Household Panel Survey and the Health Survey for England from 1991 to 2010. Age-adjusted generalized linear models were used to examine the effects of recessions (1990/91 and 2008/09) on self-reported health in the four English NHS Commissioning Regions (North, South, Midlands and London) with stratification by gender. Results Over the 20-year study period, the North had consistently higher rates of ‘not good health’ than the South [OR 1.50 (1.46–1.55) outside recessions and OR 1.29 (1.19–1.39) during recessions]. However, during periods of recession, this health divide narrowed slightly with a 2% decrease in the prevalence of ‘not good health’ in the North [OR 0.91 (0.86, 0.96)]. Conclusion This study is evidence of spatial variations in the health effects of recessions within England and the North-South divide appears to slightly reduce during recessions. Health in the North remains worse than the South.

Aim of the study Stillman's cleft is a mucogingival triangular-shaped defect on the buccal surface of a root with unknown etiology and pathogenesis. The aim of this study is to examine the Stillman's cleft obtained from excision during root coverage surgical procedures at an histopathological level. Materials and method Harvesting of cleft was obtained from two periodontally healthy patients with a scalpel and a bevel incision and then placed in a test tube with buffered solution to be processed for light microscopy. Results Microscopic analysis has shown that Stillman's cleft presented a lichenoid hand-like inflammatory infiltration, while in the periodontal patient an inflammatory fibrous hyperplasia was identified. Conclusion Stillman's cleft remains to be investigated as for the possible causes of such lesion of the gingival margin, although an inflammatory response seems to be evident and active from a strictly histopathological standpoint.

This chapter presents a theory of pseudo-wealth that can account for two important situations that arise in times of recession: (i) There are often large changes in the state of the economy with no commensurate changes in the state variables that describe it; and (ii) There are often persistent booms where (for plausible preferences) aggregate consumption seems excessive, beyond levels that are consistent with the feasibility constraints, or persistent busts with underutilization of the factors of production of the economy. With heterogeneous beliefs and a market for exploiting those differences in beliefs, pseudo-wealth will be created— that is, the sum of expected wealth of all the individuals will be larger than what is feasible for the society. Under some conditions, those perceptions will lead to higher spending than in a world with common beliefs. If those differences in beliefs disappear, pseudo-wealth will disappear, leading to adjustments in behavior that amplify the initial decrease in expected wealth. We also show that completing markets can lead to ambiguous results in terms of welfare. They can induce the creation of pseudo-wealth that makes everyone better off ex-ante (that is, everyone’s ex ante expected utility is increased), but that can lead to lower levels of production in every period—as agents wish to work less when they feel wealthier, and the adjustments that follow the disappearance of pseudo-wealth will also lead to lower levels of production. Finally, the chapter elaborates on the idea that macroeconomic adjustments may be destabilizing. Policies that diminish wage flexibility but have positive distributive effects could enhance the performance of the economy. More generally, this chapter describes the main intuitions of the results obtained in an agenda developed in Guzman and Stiglitz (2014, 2015).

This article presents a new Qual VAR model for incorporating information from qualitative and/or discrete variables in vector autoregressions. With a Qual VAR, it is possible to create dynamic forecasts of the qualitative variable using standard VAR projections. Previous forecasting methods for qualitative variables, in contrast, only produce static forecasts. I apply the Qual VAR to forecasting the 2001 business recession out of sample and to analyzing the Romer and Romer (1989) narrative measure of monetary policy contractions as an endogenous variable in a VAR. Out of sample, the model predicts the timing of the 2001 recession quite well relative to the recession probabilities put forth at the time by professional forecasters. Qual VARs -- which include information about the qualitative variable -- can also enhance the quality of density forecasts of the other variables in the system.

Perron and Wada (J Monet Econ 56:749–765, 2009) propose a new method of decomposition of the GDP in its trend and cycle components, which overcomes the identification problems of models of unobserved components (UC) and ARIMA models and at the same time, admits non-linearities and asymmetries in cycles. The method assumes that output can be represented by a non-linear model of unobserved components, where disturbances consist of a mixture of normal distributions. In this document, we apply thisalgorithm to Peruvian GDP using quarterly data from 1980 until 2011. As a result of this analysis, we choose the UC-CN model, which presents a mixture of normals in the disturbances of the trend and cycle component of output. The obtained trend clearly reflects the structural change undergone in the early 1990s. After a steep decrease of the trend or potential GDP as a result of drastic adjustment measures, output grew in a more stable way in the following years. In the same way, one can observe an increase in the growth rate of potential GDP from 2002 onwards, which coincides with the monetary reforms that took place at the time. Finally, the obtained cycles are consistent with the evolution of the Peruvian economy and of recession periods that have been traditionally identified. A comparison with other methods of decomposition is also provided.

This paper quantifies the welfare implications of the U.S. Social Security program during the Great Recession. We find that the average welfare losses due to the Great Recession for agents alive at the time of the shock are notably smaller in an economy with Social Security relative to an economy without a Social Security program. Moreover, Social Security is particularly effective at mitigating the welfare losses for agents who are poorer, less productive, or older at the time of the shock. Importantly, in addition to mitigating the welfare losses for these potentially more vulnerable agents, we do not find any specific age, income, wealth or ability group for which Social Security substantially exacerbates the welfare consequences of the Great Recession. Taken as a whole, our results indicate that the U.S. Social Security program is particularly effective at providing insurance against business cycle episodes like the Great Recession.

This paper assesses whether racial prejudice and labour market discrimination is counter-cyclical. This may occur if prejudice and discrimination are partly driven by competition over scarce resources, which intensifies during periods of economic downturn. Using British Attitudes Data spanning three decades, we find that prejudice does increase with unemployment rates. We find greater counter-cyclical effects for highly-educated, middle-aged, full-time employed men. For this group, a 1%-point increase in unemployment raises self-reported racial prejudice by 4.1%-points. This result suggests that non-White workers are more likely to encounter racially prejudiced employers and managers in times of higher unemployment. Consistent with the estimated attitude changes, we find using the British Labour Force Survey that racial employment and wage gaps increase with unemployment. The effects for both employment and wages are largest for high-skill Black workers. For example, a 1%-point increase in unemployment increases Black-White employment and wage gaps for the highly educated by 1.3%-points and 2.5%. Together, the attitude and labour market results imply that non-Whites disproportionately suffer during recessions. It follows that recessions exacerbate existing racial inequalities.

Two separate narratives have emerged in the wake of the Global Financial Crisis. One interpretation speaks of private financial excess and the key role of the banking system in leveraging and deleveraging the economy. The other emphasizes the public sector balance sheet over the private and worries about the risks of lax fiscal policies. However, the two may interact in important and understudied ways. This paper examines the co-evolution of public and private sector debt in advanced countries since 1870. We find that in advanced economies significant financial stability risks have mostly come from private sector credit booms rather than from the expansion of public debt. However, we find evidence that high levels of public debt have tended to exacerbate the effects of private sector deleveraging after crises, leading to more prolonged periods of economic depression. We uncover three key facts based on our analysis of around 150 recessions and recoveries since 1870: (i) in a normal recession and recovery real GDP per capita falls by 1.5 percent and takes only 2 years to regain its previous peak, but in a financial crisis recession the drop is typically 5 percent and it takes over 5 years to regain the previous peak; (ii) the output drop is even worse and recovery even slower when the crisis is preceded by a credit boom; and (iii) the path of recovery is worse still when a credit-fueled crisis coincides with elevated public debt levels. Recent experience in the advanced economies provides a useful out-of-sample comparison, and meshes closely with these historical patterns. Fiscal space appears to be a constraint in the aftermath of a crisis, then and now.

We investigate the nature of asymmetries in U.S. business cycle dynamics using a dynamic two-factor model of output, investment, and consumption that incorporates both the common stochastic trend implied by neoclassical growth theory and a common transitory component. This framework allows for identification of both types of asymmetry commonly identified in the literature: 1. Shifts in the growth rate of the trend component and 2. Transitory deviations below trend, or "plucking". The model also lends itself easily to tests of the marginal significance of each type of asymmetry when the other is allowed to be present. Such tests suggest that both types of asymmetries have played a significant role in post-war recessions, although the nature of shifts in the growth rate of trend is different than the received literature suggests. We also allow for a one-time structural break in the long run growth rate of the common stochastic trend (a productivity slowdown) and in the magnitude of the asymmetry parameters. We find evidence of a productivity slowdown and an increase in the relative importance of shifts in the common stochastic trend vs. the "plucking" type of asymmetry. The evidence suggests a gradual structural break which begins in the mid 1960's and is complete by the end of 1973.