How can recessions be brought to an end? Effects of macroeconomic policy actions on durations of recessions



Document title: How can recessions be brought to an end? Effects of macroeconomic policy actions on durations of recessions
Journal: Journal of applied economics
Database: CLASE
System number: 000394997
ISSN: 1667-6726
Authors: 1
2
Institutions: 1TOBB University of Economics and Technology, Ankara. Turquía
2Economic Policy Research Foundation of Turkey, Ankara. Turquía
Year:
Season: Nov
Volumen: 16
Number: 2
Pages: 179-198
Country: Argentina
Language: Inglés
Document type: Artículo
Approach: Analítico, descriptivo
English abstract This paper analyzes how effective macroeconomic policy actions are in ending recessions. We also investigate which structural factors help the country to experience shorter recessions. We implement survival regression analysis and conclude that expansionary monetary policy significantly decreases durations of recessions whereas fixing the exchange rate does not have an effect on the durations of recessions. Expansionary fiscal policy has undesired effects and decreases the probability that recession will end, thus increasing the durations of recessions. The analysis of country specific factors indicates that emerging countries experience shorter recessions. Recessions in countries with higher trade openness last significantly longer. Financial openness and institutional quality do not have significant effects of recession durations. The empirical analysis takes into account alternative probability distributions and endogeneity of policy actions
Disciplines: Economía
Keyword: Política económica,
Recesión,
Política macroeconómica,
Duración de ciclos,
Econometría
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