The Great Recession’s long-term damage

Laurence Ball, 1 July 2014

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According to macroeconomics textbooks, a fall in aggregate demand causes a recession in which output drops below potential output – the normal level of production given the economy’s resources and technology. This effect is temporary, however.

Topics: Global crisis
Tags: Great Recession, growth, hysteresis, OECD, potential output, unemployment

The great British jobs and productivity mystery

João Paulo Pessoa, John Van Reenen, 28 June 2014

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With some economic recovery having finally got underway, the UK is still feeling the repercussions of the so-called ‘Great Recession’. National output, as measured by GDP, fell by over 7% from its peak in January 2008 – the biggest fall since the inter-war years – and only returned to its pre-crisis level in April 2014 (NIESR 2014).

Topics: Europe's nations and regions
Tags: Great Recession, productivity growth, UK, unemployment

Trade policy through 2013: Signs of improvement but new policy concerns

Chad P Bown, 27 June 2014

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How countries apply their trade policies has been of heightened interest since the early days of the Great Recession (Baldwin and Evenett 2009).

Topics: International trade
Tags: G20, Great Recession, protectionism, Trade barriers, TTBs

Falling real wages in the UK

David Blanchflower, Stephen Machin, 12 May 2014

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There have been unprecedented falls in real wages in the UK since the start of the recession triggered by the financial crisis of 2008. This did not happen in previous economic downturns – median real wage growth slowed down or stalled, but it did not fall.

Topics: Labour markets, Poverty and income inequality
Tags: Great Recession, Inequality, real wages, UK, unemployment, US, wages

Has US household deleveraging ended? A model-based estimate of equilibrium debt

Bruno Albuquerque, Ursel Baumann, Georgi Krustev, 18 April 2014

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The balance sheet adjustment in the household sector has been a prominent feature of the last US recession and subsequent recovery. The beginning of the economic downturn in late 2007 broadly coincided with a sustained reduction in household liabilities relative to income – that is, household deleveraging – which contrasted with the strong build-up of debt before the crisis.

Topics: Global crisis
Tags: Great Recession, household debt, household deleveraging

The US manufacturing recovery: Uptick or renaissance?

Oya Celasun, Gabriel Di Bella, Tim Mahedy, Chris Papageorgiou, 24 February 2014

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Amid increasing anecdotes of a ‘renaissance’ in US manufacturing, many commentators have argued that the sector may contribute more significantly to domestic GDP and global industrial output in future (e.g. Financial Times 2012, New York Times 2012, McKinsey Global Institute 2012, Citi Research 2013).

Topics: Global economy
Tags: Great Recession, growth, manufacturing, US

How did household balance sheets affect consumption during the Great Recession?

Scott Ross Baker, 19 January 2014

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The presence of substantial amounts of household debt in 2007 has prompted many economists and policymakers to link debt to the depth of the recession in the following years. The possibility that higher levels of household debt induce deeper or longer recessions has important implications for both financial regulation and the size of the social safety net.

Topics: Global crisis
Tags: consumption, Great Recession, household debt

Job losses from the credit crunch during the Great Recession

Samuel Bentolila, Marcel Jansen, 1 February 2014

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Policymakers in both Europe and the US are concerned about the economic implications of the current shortage of credit. As the International Monetary Fund put it recently, “policymakers want to support markets because the decline in lending is seen to be a primary factor in the slow recovery” (IMF 2013).

Topics: Global crisis
Tags: Credit crunch, Great Recession, job losses, Spain

Crisis-proof services: Why trade in services did not suffer during the 2008-09 collapse

Andrea Ariu, 24 December 2013

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Following the failure of Lehman Brothers in September 2008, international trade in goods collapsed by 30%. This dramatic collapse was highly synchronised across countries and mostly concentrated in the category of durable goods (Baldwin 2009). Surprisingly, international trade in services barely reacted to the crisis.

Topics: International trade
Tags: Great Recession, trade in services

Does policy uncertainty reduce economic activity? Insights and evidence from large trade reforms

Kyle Handley, Nuno Limão, 23 November 2013

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The impact of policy uncertainty on economic activity is an issue traditionally associated with developing countries. Since 2008, however, the spotlight has shifted. Governments’ responses to the Great Recession and the Eurozone crisis have raised considerable uncertainty about the future policies of advanced economies.

Topics: International trade
Tags: China, Eurozone crisis, Great Recession, trade, uncertainty, US, WTO

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