Financial frictions, trends, and the great recession

• 成果类型: Article
• 署名作者: Guerron-Quintana, Pablo A.; Jinnai, Ryo
• 署名单位: Boston College; Escuela Superior Politecnica del Litoral; Hitotsubashi University
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE702
• 发表日期: 2019
• 页码: 735-773
• 关键词: Endogenous productivity; financial friction; great recession; liquidity shocks; trend shift

摘要

We study the causes behind the shift in the level of U.S. GDP following the Great Recession. To this end, we propose a model featuring endogenous productivity a la Romer and a financial friction a la Kiyotaki-Moore. Adverse financial disturbances during the recession and the lack of strong tailwinds post-crisis resulted in a severe contraction and the downward shift in the economy's trend. Had financial conditions remained stable during the crisis, the economy would have grown at its average growth rate. From a historical perspective, the Great Recession was unique because of the size and persistence of adverse shocks, and the lackluster performance of favorable shocks since 2010.