The Causation of Major Recessions: Summary and Discussion of Empirical Findings

Christopher Dow

in Major Recessions

Published in print October 2000 | ISBN: 9780199241231
Published online November 2003 | e-ISBN: 9780191596179 | DOI:
 The Causation of Major Recessions: Summary and Discussion of Empirical Findings

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The empirical findings of this study rest on two sorts of evidence: first, a set of detailed case studies of the five major UK recessions since 1920; and second, a statistical analysis that seeks to explain these and other fluctuations in terms of indicators of four types of exogenous demand shock. This chapter summarizes this evidence and its underlying rationale; it needs to be read with Ch. 10, and like that aims to be self‐contained; the picture presented does not have to be accepted or rejected as a bloc. The explicanda of the study are taken to be not absolute falls in output during a recession, but deviations of output from previous trend rates of constant‐employment growth; Sect. 11.1 summarizes how such trends are estimated, and this provides a rough estimate of the output loss resulting from major recessions. Sect. 11.2 summarizes the statistical analysis of the causation of major recessions and other fluctuations, and recapitulates the methods used to estimate the scale of shocks and their effect on output; Sect. 11.3 provides a summary of the case studies of the five major UK recessions, and the Great Depression in the USA; and Sect. 11.4 summarizes possible reasons for the long period from World War II to 1973 that saw fairly steady growth without major recessions. Section 11.5 concludes with notes on, first, the effect of the three major recessions since 1973 on the stock of public debt; and, second, whether major recessions are predictable.

Keywords: case studies; economic growth; employment; fluctuations; output; public debt; recession; shock; trends; UK; USA

Chapter.  12401 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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