Faculty of Economics and Business Administration Publications Database

Do large recessions lower output permanently?

Wolters, Maik H.
Volume: 121
Number: 3
Pages: 516 - 519
Month: December
ISSN-Print: 0165-1765
Link External Source: Online Version
Year: 2013
Keywords: Unit root tests; Quantile autoregression; GDP; Recessions; Asymmetries

We apply a recent quantile autoregression unit root test to US GDP. The test takes into account that the transmission of a shock might depend on the sign and the size of the shock. We find that positive and negative shocks including large recessionary shocks like the 2008/2009 crisis have permanent effects on output.