Document Type
Discussion Paper
Publication Date
10-21-2020
CFDP Number
2260
CFDP Pages
42
Journal of Economic Literature (JEL) Code(s)
E1, E3
Abstract
Nine U.S. recessions and three expansions are analyzed in this paper using a structural macroeconometric model. With two exceptions and one partial exception, the episodes are predicted well by the model, including the 2008-2009 recession, conditional on the actual values of the exogenous variables. The main exogenous variables are stock prices, housing prices, import prices, exports, and exogenous government policy variables. Monetary policy is endogenous. Fluctuations in stock and housing prices (housing prices after 1995) are important drivers of output fluctuations—large wealth effects on household expenditures.
Recommended Citation
Fair, Ray C., "Analysis of Nine U.S. Recessions and Three Expansions" (2020). Cowles Foundation Discussion Papers. 2576.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2576