Working Paper: NBER ID: w16243
Authors: Andrew K. Rose; Mark M. Spiegel
Abstract: We update Rose and Spiegel (2009a, b) and search for simple quantitative models of macroeconomic and financial indicators of the "Great Recession" of 2008-09. We use a cross-country approach and examine a number of potential causes that have been found to be successful indicators of crisis intensity by other scholars. We check a number of different indicators of crisis intensity, and a variety of different country samples. While countries with higher income seemed to suffer worse crises, we find few clear reliable indicators in the pre-crisis data of the incidence of the Great Recession. Countries with current account surpluses seemed better insulated from slowdowns.
Keywords: Great Recession; Crisis Indicators; Macroeconomic Models
JEL Codes: E65; F30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| richer countries (O57) | crisis severity (H12) |
| larger run-up in stock market valuations (G19) | crisis severity (H12) |
| closer trade linkages to the United States (F15) | crisis severity (H12) |
| current account surpluses (F32) | crisis severity (H12) |
| real GDP per capita (O49) | crisis severity (H12) |
| stock market run-up (E44) | crisis severity (H12) |
| degree of credit market regulation (G18) | crisis severity (H12) |