The Short-Run Effects of the Great Recession on Crime

Pallab Kumar Ghosh

doi:10.1007/s41996-018-0014-8

Money and credit during normal times and house price booms: evidence from time-frequency analysis

Empirica ◽

10.1007/s10663-019-09457-2 ◽

2019 ◽

Vol 47 (4) ◽

pp. 835-861

Author(s):

Maciej Ryczkowski

Keyword(s):

Great Recession ◽

House Prices ◽

House Price ◽

Industrialized Countries ◽

Time Frequency ◽

The Great Recession ◽

Time Period ◽

Price Boom ◽

The Us ◽

Short Run

Abstract I analyse the link between money and credit for twelve industrialized countries in the time period from 1970 to 2016. The euro area and Commonwealth Countries have rather strong co-movements between money and credit at longer frequencies. Denmark and Switzerland show weak and episodic effects. Scandinavian countries and the US are somewhere in between. I find strong and significant longer run co-movements especially around booming house prices for all of the sample countries. The analysis suggests the expansionary policy that cleans up after the burst of a bubble may exacerbate the risk of a new house price boom. The interrelation is hidden in the short run, because the co-movements are then rarely statistically significant. According to the wavelet evidence, developments of money and credit since the Great Recession or their decoupling in Japan suggest that it is more appropriate to examine the two variables separately in some circumstances.

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Financial shocks and inflation dynamics

Macroeconomic Dynamics ◽

10.1017/s1365100521000444 ◽

2021 ◽

pp. 1-29

Author(s):

Angela Abbate ◽

Sandra Eickmeier ◽

Esteban Prieto

Keyword(s):

Financial Crisis ◽

Great Recession ◽

Policy Implication ◽

Vector Autoregressive Model ◽

Financial Shocks ◽

Trade Off ◽

Vector Autoregressive ◽

The Great Recession ◽

Short Run ◽

Dual Mandate

Abstract We assess the effects of financial shocks on inflation, and to what extent financial shocks can account for the “missing disinflation” during the Great Recession. We apply a Bayesian vector autoregressive model to US data and identify financial shocks through a combination of narrative and short-run sign restrictions. Our main finding is that contractionary financial shocks temporarily increase inflation. This result withstands a large battery of robustness checks. Negative financial shocks help therefore to explain why inflation did not drop more sharply in the aftermath of the financial crisis. Our analysis suggests that higher borrowing costs after negative financial shocks can account for the modest decrease in inflation after the financial crisis. A policy implication is that financial shocks act as supply-type shocks, moving output and inflation in opposite directions, thereby worsening the trade-off for a central bank with a dual mandate.

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UNSECURED CREDIT, PRODUCT VARIETY, AND UNEMPLOYMENT DYNAMICS

Macroeconomic Dynamics ◽

10.1017/s1365100520000140 ◽

2020 ◽

pp. 1-37

Author(s):

Mario Rafael Silva

Keyword(s):

Great Recession ◽

Product Variety ◽

Free Entry ◽

Financial Shocks ◽

Productivity Shocks ◽

The Great Recession ◽

Borrowing Constraint ◽

Short Run ◽

Prime Determinant ◽

Revolving Credit

Revolving credit is the prime determinant of short-run household liquidity and comoves positively with product variety and negatively with unemployment. I develop a theory of feedback between revolving credit and product development and examine its ability to explain labor market volatility. Extending the Mortensen–Pissarides model with an endogenous borrowing constraint and free entry of monopolistically competitive firms reproduces stylized facts in the data and amplifies both productivity and financial shocks through mutual causality. Higher debt limits encourage firm entry and raise product variety (the entry channel), and greater variety makes default more costly and thereby raises the equilibrium debt level (the consumption value channel). Though productivity shocks are sufficient to generate higher volatility, financial shocks are essential in approximating the time series patterns of unemployment, vacancies, and revolving credit in the data, and reproduce the rise in unemployment during the Great Recession.

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Was Keynesian economics ever dead? If so, has it been resurrected?

Review of Keynesian Economics ◽

10.4337/roke.2020.01.05 ◽

2020 ◽

Vol 8 (1) ◽

pp. 46-60

Author(s):

Steven M. Fazzari

Keyword(s):

Interest Rates ◽

Great Recession ◽

Supply Side ◽

Demand Side ◽

Short Term ◽

Natural Rate ◽

The Great Recession ◽

Keynesian Economics ◽

Natural Rate Of Interest ◽

Short Run

This article reflects on rising interest in Keynesian macroeconomics in the aftermath of the Great Recession. I identify aspects of Keynesian thinking that never were completely banished from the mainstream as well as threads of Keynesian macroeconomics that have become more influential since the crisis. However, the way most mainstream analysis continues to invoke the zero lower bound for short-term interest rates and the concept of the ‘natural’ rate of interest implies that any Keynesian resurrection outside of heterodoxy remains incomplete. The future may bring broader recognition of how demand leads economic growth and of ways in which the demand side leads the supply side beyond the typical textbook ‘short run.’

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