scholarly journals THE REGIME-SWITCHING VOLATILITY OF EURO AREA BUSINESS CYCLES

2017 ◽  
Vol 22 (2) ◽  
pp. 426-469 ◽  
Author(s):  
Stéphane Lhuissier
Keyword(s):  
Business Cycles ◽  
Euro Area ◽  
Great Recession ◽  
Time Variation ◽  
Regime Switching ◽  
Technology Shocks ◽  
The Great Recession ◽  
Structural Disturbance ◽  
Different Types ◽  
High Volatility

We document the strong evidence of time variation in the volatility of Euro Area business cycles since 1970. Then we provide the quantitative sources of these changes using a medium-scale DSGE model allowing time variation in structural disturbance variances. We show that (1) the size of different types of shock oscillates, in a synchronized manner, between two regimes over time, with the high-volatility regime prevailing predominantly in the 1970s, sporadically in the 1980s and 1990s, and during the Great Recession; (2) their relative importance remains, however, unchanged across regimes, where neutral technology shocks and marginal efficiency of investment shocks are the dominant sources of business cycle fluctuations; and 3) these investment shocks, which affect the transformation of savings into productive capital, can be interpreted as an indicator of credit conditions.

scholarly journals The Aggregate Implications of Regional Business Cycles

Econometrica ◽  
2019 ◽  
Vol 87 (6) ◽  
pp. 1789-1833 ◽  
Author(s):  
Martin Beraja ◽  
Erik Hurst ◽  
Juan Ospina
Keyword(s):  
Business Cycles ◽  
Great Recession ◽  
Aggregate Demand ◽  
Strong Relationship ◽  
Aggregate Data ◽  
New Keynesian ◽  
Aggregate Fluctuations ◽  
Wage Dynamics ◽  
The Great Recession ◽  
Wage Stickiness

Making inferences about aggregate business cycles from regional variation alone is difficult because of economic channels and shocks that differ between regional and aggregate economies. However, we argue that regional business cycles contain valuable information that can help discipline models of aggregate fluctuations. We begin by documenting a strong relationship across U.S. states between local employment and wage growth during the Great Recession. This relationship is much weaker in U.S. aggregates. Then, we present a methodology that combines such regional and aggregate data in order to estimate a medium‐scale New Keynesian DSGE model. We find that aggregate demand shocks were important drivers of aggregate employment during the Great Recession, but the wage stickiness necessary for them to account for the slow employment recovery and the modest fall in aggregate wages is inconsistent with the flexibility of wages we observe across U.S. states. Finally, we show that our methodology yields different conclusions about the causes of aggregate employment and wage dynamics between 2007 and 2014 than either estimating our model with aggregate data alone or performing back‐of‐the‐envelope calculations that directly extrapolate from well‐identified regional elasticities.

scholarly journals Household heterogeneity in the euro area since the onset of the Great Recession

2016 ◽  
Vol 38 (1) ◽  
pp. 181-197 ◽  
Author(s):  
Miguel Ampudia ◽  
Akmaral Pavlickova ◽  
Jiri Slacalek ◽  
Edgar Vogel
Keyword(s):  
Euro Area ◽  
Great Recession ◽  
The Great Recession ◽  
Household Heterogeneity

scholarly journals Who Suffers During Recessions?

2012 ◽  
Vol 26 (3) ◽  
pp. 27-48 ◽  
Author(s):  
Hilary Hoynes ◽  
Douglas L Miller ◽  
Jessamyn Schaller
Keyword(s):  
Business Cycles ◽  
Great Recession ◽  
The United States ◽  
Market Outcomes ◽  
Race And Gender ◽  
Demographic Groups ◽  
The Great Recession ◽  
Low Education ◽  
Hispanic Workers ◽  
And Gender

In this paper, we examine how business cycles affect labor market outcomes in the United States. We conduct a detailed analysis of how cycles affect outcomes differentially across persons of differing age, education, race, and gender, and we compare the cyclical sensitivity during the Great Recession to that in the early 1980s recession. We present raw tabulations and estimate a state panel data model that leverages variation across U.S. states in the timing and severity of business cycles. We find that the impacts of the Great Recession are not uniform across demographic groups and have been felt most strongly for men, black and Hispanic workers, youth, and low-education workers. These dramatic differences in the cyclicality across demographic groups are remarkably stable across three decades of time and throughout recessionary periods and expansionary periods. For the 2007 recession, these differences are largely explained by differences in exposure to cycles across industry-occupation employment.

scholarly journals Does Ethics Reward on Public Markets: Empirical Evidences Ten Years After the Great Recession

2019 ◽  
Vol 10 (3) ◽  
pp. 1
Author(s):  
Catello Giovanni Landi ◽  
Valerio Rapone ◽  
Danilo Tuccillo ◽  
Andrea Rey
Keyword(s):  
Great Recession ◽  
Stock Exchange ◽  
Listed Company ◽  
Corporate Sustainability ◽  
Exchange Market ◽  
Public Markets ◽  
The Great Recession ◽  
Positive Externalities ◽  
High Volatility ◽  
The Impact

In the aftermath of the last Great Recession in 2007, firms’ commitment to social responsibility and sustainability started to be considered a corporate leverage to make extra-returns as well as to improve corporate reputation on institutional markets. This in turn has implied a lower uncertainty among investors and a higher trust from stakeholders’ categories, rising virtuous firms’ returns to over-perform their less responsible peers. Hence, this paper investigates the positive externalities of CSR on Italian stock exchange market, focusing on Blue Chips’ financial performance over the ten years post-crisis. In particular, we examined whether a listed company has been rewarded by its stakeholders over a high volatility periods, leveraging on CSR and Sustainability issues. Empirical findings highlight, ceteris paribus, two implications in regards to the impact of sustainability rating on corporate financial health. Indeed, the effect of CSR and corporate sustainability improves significantly companies’ earning performance (Return on Asset), although firms do not benefit from economic outperformances (Earning per Share) on stock exchange market.

scholarly journals Die Zinslast des Bundes in der Schuldenkrise: Wie lukrativ ist der „sichere Hafen“?

2012 ◽  
Vol 13 (Supplement) ◽  
pp. 81-91
Author(s):  
Jens Boysen-Hogrefe
Keyword(s):  
Central Bank ◽  
Federal Government ◽  
Euro Area ◽  
Great Recession ◽  
Yield Curve ◽  
Debt Crisis ◽  
Macroeconomic Conditions ◽  
The Great Recession ◽  
The Mean ◽  
Interest Payments

Abstract In the aftermath of the Great Recession and during the debt crisis in the euro area yields on German federal bonds have been exceptionally low. This analysis tries to calculate the profits that the federal government makes due to these low yields. The interest payments that are due to emissions of bonds and bills made between 2009 and 2012 are approximated and compared to several benchmark scenarios. Compared to the mean yields of the years 1999-2008 profits of the federal government are quite high (68 billion euros). Application of yield curve models show that most of these profits are due to the macroeconomic conditions in the euro area and to low central bank rates. To a much smaller extend these profits are due to flight into safety, which, however, has become more relevant recently.

scholarly journals Resilience, Agency and Coping with Hardship: Evidence from Europe during the Great Recession

2018 ◽  
Vol 48 (03) ◽  
pp. 547-567 ◽  
Author(s):  
HULYA DAGDEVIREN ◽  
MATTHEW DONOGHUE
Keyword(s):  
Great Recession ◽  
Coping Mechanisms ◽  
European Countries ◽  
Primary Data ◽  
Structural Constraints ◽  
The Great Recession ◽  
Key Informant ◽  
Different Types ◽  
And Coping ◽  
Household Responses

AbstractThis paper aims to contribute to the growing literature on resilience by focusing on coping with hardship during the Great Recession, drawing upon primary data gathered through household and key informant interviews in nine European countries. As the resilience approach highlights agency, the paper examines the nature of household responses to hardship during this period on the basis of the ‘structure-agency problem’. An important contribution of this paper is to identify different forms of agency and discuss their implications. More specifically, we conceptualise three different types of agency in coping with hardship: absorptive, adaptive and transformative. Analysis of the findings indicates that structural constraints remain prominent. Most coping mechanisms fall under the category of absorptive and adaptive agency characterised here as burden-bearing actions that ‘conform’ to changing circumstances rather than shaping those circumstances.

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