Accounting for the role of investment frictions in recessions
Bibliographic Data
| ID | 9723548 |
|---|---|
| Authors | Fernando del Río (0000-0001-7448-5045, University of Santiago de Compostela Spain, corresponding author), Francisco‐Xavier Lores (0000-0003-1597-4062, University of Santiago de Compostela Spain) |
| Year | 2023 |
| Volume | 90 |
| Issue | 360 |
| Pages | 1089-1118 |
| Publication date | 2023-10-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12485 |
| OpenAlex | W4381252763 |
| Language | EN |
| References cited | 28 |
Our business cycle accounting exercise reveals that both capital and investment efficiency declines played a prominent role in accounting for the output downturn during the US Great Recession. The evidence indicates that an increase in firms' investment costs may have played a substantial role during the US Great Recession, consistent with business cycle models in which firms face financial frictions. The negligible role played by the total factor productivity decline in accounting for the output downturn during the US Great Recession found by previous works can be explained by the movement in opposite directions of both labour and capital efficiency. However, we find that labour efficiency falling was the main force driving output downturn in the 1982 recession and the euro area Great Recession
Business cycle · Capital (architecture) · Economics · Global recession · Investment (military) · Labour economics · Macroeconomics · Monetary economics · Productivity · Recession · Total factor productivity · Economic theories and models · Economic Theory and Policy · Global Financial Crisis and Policies
| Citation velocity | historical |
|---|---|
| Highly cited | No |