Working Paper: NBER ID: w16589
Authors: Michael D. Bordo; John S. Landon-Lane
Abstract: This paper compares the recent global crisis and recession to earlier international financial crises and recessions. Based on existing chronologies of banking, currency and debt crises we identify clusters of crises. We use an identification of extreme events and a weighting scheme based on real GDP relative to the U.S. to identify global financial crises since 1880. For banking crises we identify five global ones since 1880: 1890-91, 1907-08, 1913-14, 1931-32, 2007-2008. \n \nIn terms of global incidence the recent crisis is fourth in ranking and comparable to 1907-08. We also calculate output losses during the recessions associated with global financial crises and again the recent crisis is similar in severity to 1907-08 and is fourth in ranking. On both dimensions the recent crisis is a pale shadow of the Great depression. The relatively mild experience of the recent crisis may reflect institutional and policy learning.
Keywords: financial crisis; global recession; historical analysis
JEL Codes: E30; G01; N20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| global financial crises (F65) | subsequent recessions (E65) |
| recent financial crisis (G01) | output losses (D57) |
| historical crises (G01) | understanding recent crisis (H12) |
| institutional and policy learning (O17) | mitigated effects of recent crisis (F65) |
| response from monetary authorities (E49) | overall economic outcomes (P47) |