Recessions : prospects and developments / Nerea M. Pérez and June A. Ortega, editors.

Format:

Book

Contributor:

Pérez, Nerea M.

Ortega, June A.

Language:

English

Subjects (All):

Recessions.

Business cycles.

Economic forecasting.

Physical Description:

1 online resource (184 p.)

Edition:

1st ed.

Place of Publication:

New York : Nova Science Publishers, c2009.

Language Note:

English

Summary:

A critical consideration in understanding business cycles is the amplification and propagation of shocks to the economic system. Many recessions seem to arise without a clearly identifiable cause or at least one of significant magnitude to justify an economy-wide recession. How can a small shock cause large changes in the economy? What are the mechanisms that amplify a modest shock such that a serious recession ensues? Despite the persistent search for a mechanism for business cycle amplification and propagation, much research in business cycles seems to ignore the likely role of the financial system. If a shock to the economy inhibits the capital allocation capability of an economy, then a seemingly mild shock may be amplified through its impact on new investment thereby snuffing out economic growth and causing a recession. This book provides new research on the field of recessions from around the globe.

Contents:

Intro

RECESSIONS:PROSPECTS AND DEVELOPMENTS

CONTENTS

PREFACE

Chapter 1WHAT IS A RECESSION, WHO DECIDES WHEN ITSTARTS, AND WHEN DO THEY DECIDE?∗

Abstract

What is a Recession?

Who Decides When the U.S. Economy is in a Recession?

If There Is a Recession, When Will We Know When It Started?

Rhetorical and Analytical Significance

References

Chapter 2BUSINESS CYCLES IN ECONOMIC THEORY:EXOGENOUS OR ENDOGENOUS?

1. Introduction

2. The RBC Theory

3. The EBC Theory

4. And What About the Facts?

5. An Application: Utility Maximization with Market Inefficiency

6. The Dynamics of Perpetual Cycles - A Numerical Example

7. Concluding Remarks

Appendix. The Analytics of the RBC Model

a. The Non-Equilibrium Optimal Control Problem

b. Optimality Conditions and the Steady State

c. Transitional Dynamics

d. Calibration and the Results of the Benchmark RBC Model

Chapter 3EVALUATING THE POTENTIALFOR A RECESSION IN 2008∗

Introduction

How Recessions Are Defined

What Causes Recessions?

Employment and the Business Cycle

What Causes the Business Cycle?

Current Recessionary Pressures

Housing Bust

Liquidity Crunch

Energy Shock

Popular Leading Indicators of Recessions

Yield Curve Inversion

Credit Spreads

Stock Prices

Index of Leading Indicators

Policy Responses

Fiscal Stimulus

Monetary Policy

Are Recessions Unavoidable?

Chapter4THERECESSIONARYIMPACTOFSTABILIZINGINFLATION

1.Introduction

2.RegimeShiftsinCanadianInflationDynamics

2.1.TheBackward-LookingPhillipsCurve

2.2.EvidenceofStructuralBreaksinReduced-FormInflationModels

2.2.1.StructuralBreaks:QuarterlyData

2.2.2.StructuralBreaksinthePost-1984Period:MonthlyData.

2.3.ChangesintheTimeSeriesPropertiesofCanadianInflation

3.AModeloftheCanadianEconomy

3.1.NominalRigiditiesandtheDynamicsoftheEconomy

3.1.1.FirmsandPriceSetting

3.1.2.LaborSupplyandWageSetting

3.2.RationalExpectationsEquilibrium

3.3.WageandPriceInflation:thePhillipsCurve

4.AMethodtoBuildCounterfactualHistories

4.1.ModelConsistentDisturbances:TheOne-ShockCase

4.1.1.TheConsistencyIssue

4.1.2.TheSingularityIssue

4.2.Multiple-shockModels

5.TheImpactofInflationTargetingonthePhillipsCurve:CounterfactualExperimentfortheCanadianEconomy

5.1.Data

5.1.1.MonetaryPolicyRule

5.2.CounterfactualundertheAlternativeMonetaryPolicy

5.2.1.ShiftsinInflationDynamicsandthePhillipsCurve

5.2.2.InflationStabilizationandthe1992-1994Recession

5.2.3.TheRoleofMonetaryPolicyShocksinthe1992-1994Recession

5.2.4.CounterfactualPathsofthePolicyInstrumentandtheMonetaryPolicyTrans-missionMechanism

6.Conclusion

A.Appendix:ModelParametrization

A.1.PreferencesandTechnology

A.2.ExogenousVariables

Acknowledgment

Chapter 5ON ACCURACY MEASURE OF RECESSIONFORECASTS

2. Empirical Model

3. Empirical Results

3.1. Data Sources

3.2. Forecast Evaluations

3.3. Results on Recession Forecasts

Notes on Tables 2-5

3.4. Results on Future Recession Forecasts

3.4.1. Results on Canadian Recessions

3.4.2. Results on American Recessions

3.5. Discussions

4. Conclusions

Chapter6PREDICTINGRECESSIONSUSINGFINANCIALVARIABLES

2.MethodsforPredictingRecessions

3.EmpiricalEvidence

4.ConcludingRemarks

Chapter 7MYSTERIOUS SOCIO-ECONOMIC DISTURBANCESAND CYCLICAL FLUCTUATIONS

I. Nature and Scope of Business Cycles

II. Non-recessionary Economic Disturbances.

III. Contemplation of the Policy Measures

Expert CommentaryDYNAMIC INVESTOR RISK PREMIAAND RECESSIONS

The Investment Decisions of Firms

Theoretical Dynamics of the Risk Premium

Asset Pricing Models and the Risk Premium

The Macroeconomic Model

Macroeconomic Fluctuations and the Fama-French Risk Premia

Discussion and Interpretation

New Directions in Research

INDEX

Blank Page.

Notes:

Description based upon print version of record.

Includes bibliographical references and index.

Description based on print version record.

ISBN:

1-61470-734-0

OCLC:

753968430