Drivers of the Post-Crisis Slump in the Eurozone and the US Report as inadecuate

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The Global Crisis led to a sharp contraction and long-lasting slump in both Eurozone and US real activity, but the post-crisis adjustment in the Eurozone and the US shows striking differences. This column argues that financial shocks were key determinants of the 2008-09 Great Recession, for both the Eurozone and the US. The post-2009 slump in the Eurozone mainly reflects a combination of adverse aggregate demand and supply shocks, in particular lower productivity growth, and persistent adverse shocks to capital investment linked to the poor health of the Eurozone financial system. Mono-causal explanations of the persistent slump are thus insufficient. Adverse financial shocks were less persistent for the US.

Item Type: MPRA Paper -

Original Title: Drivers of the Post-Crisis Slump in the Eurozone and the US-

Language: English-

Keywords: Post-crisis slump, Eurozone, United States, demand and supply shocks, financial shocks-

Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal EconomyE - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and CyclesE - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and CreditE - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General OutlookF - International Economics > F3 - International FinanceF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance-

Author: Kollmann, Robert


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