Growth Dynamics: The Myth of Economic Recovery

Authors: Cerra, Valerie; Saxena, Sweta Chaman

Source: The American Economic Review, Volume 98, Number 1, March 2008 , pp. 439-457(19)

Publisher: American Economic Association

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Abstract:

Using panel data for a large set of high-income, emerging market, developing, and transition countries, we find robust evidence that the large output loss from financial crises and some types of political crises is highly persistent. The results on financial crises are also highly robust to the assumption on exogeneity. Moreover, we find strong evidence of growth over optimism before financial crises. We also find a distinction between the output impact of civil wars versus other crises, in that there is a partial output rebound for civil wars but no significant rebound for financial crises or the other political crises.

Document Type: Short communication

DOI: http://dx.doi.org/10.1257/aer.98.1.439

Publication date: 2008-03-01

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The American Economic Review is a general-interest economics journal. The journal is published quarterly and contains articles on a broad range of topics. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.
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