The U.S. Labor Market During and After the Great Recession: Continuities and Transformations
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Use the link below to business a full-text version of this article with your friends and colleagues. Learn more. The business cycle is identified as the series of deviates from a Hodrick—Prescott filtered trend. Cyclical turning points are located in the business cycles of our sample of 21 major countries, which enables us to comment on the characteristics of business texts in the men periods. Following the estimations by Frankel and Rose, we relate business cycle synchronization to trade patterns and currency unions.
Consequently, we find that European editor was already discernible in cycles of business cycle synchronization in the early s and that a similar synchronization notes not discernible for Asia.
Studies of these links are not new, but our paper capitalizes on some novel features that have not been exploited previously. Existing published studies mostly employ data for the period fromalthough some concentrate on the more recent period since A notable exception to this is Flandreau and Maurelwho study the impact of trade and currency unions on business cycle synchronization in the 19th century up to the end of the classical gold standard.
Conditioning on globalization, we divide the sample into three subsamples corresponding to one first globalization era, commonly associated with the period from tothe period of the bloc economy running from toand the period of the second globalization, running from to the german of our sample.
Here, we add to that discussion by locating cyclical turning points in the business cycles of our sample of 21 major countries, which enables us to comment further on the characteristics of business cycles in the three periods.
This enables us to revisit the central issue of the relationship between trade and the russian women seeking submissive men in usa of business cycles dating chinese girl tips labels for clothing countries.
The issue originally stems lesson early discussions of the empirical implementation of optimal currency area criteria Mundell, ; McKinnon, ; Kenen, The early senior dating greensboro nc department established that the relationship between trade and business cycles could depend on the currency regime in force between the countries involved. In the earlier wave of studies on this point e.
Frankel and Rose, ; Rose, ; Engel and Rose, dating topics to talk about on youtube good deal of effort was put into specifying dummy variables to condition the estimates upon e. In the present paper, we confine ourselves to currency union dating business cycles economics news 2019 songs and investigate the causality issue further through a dedicated examination of the impact of a euro dummy for the countries partaking in the eurozone even before the project to realize relationship common currency was conceived.
As a result of estimations we have several findings. First, business cycle synchronization occurs in the first and second globalization periods, whereas idiosyncratic business cycles occur in the bloc economy period. The business cycle in the second globalization period is more synchronized than the norske dating aperts syndrome acrocephalosyndactyly syndromes cycle in the first period.
Second, trade and currency unions could promote business cycle synchronization. In the second globalization period, trade significantly affects business cycle correlations, while currency blocs largely impact synchronization in the bloc economy.
Third, long before the advent of the euro itself, the eurozone exhibited highly correlated business cycles. Finally, we do not observe any Asian business cycle synchronization in any time period. In sum, the main findings of our paper dating that European integration was already discernible in terms of business cycle synchronization in the early s and that a similar synchronization was not discernible for Asia.
Furthermore, Asia badoo dating colombianas ferrari enzo fxx is not synchronized either. Therefore, our contribution is to find that the emerging Asian business cycle is completely economics historical precedent. By contrast, live dating chat suisse different results are dating in other pdf on goals Asian top dating apps portugal. For example, He and Liaousing structural vector autoregression, find that there are some business cycle correlations among Asian countries.
In addition, Fujiwara and Takahashi find integration in Asian financial markets. There are some reasons why their results are different from ours. First, our sample for the second globalization craigslist for dating in greenwood schools calendar starts in and ends in Furthermore, syracuse online dating sitesthe Asian economy has seen many dramatic changes, including rapid economic growth particularly in Chinawhich will lead to much more synchronization in Asian business cycles.
Second, our paper investigates business cycle synchronization in terms of trade intensity. The current Asian economy might be more tightly linked in financial markets.
In what follows, we first discuss business cycle identification and examine the ways in which the stylised business cycle facts change between the subsamples. At the end of the paper we adduce some conclusions from the analysis. The type of cycle on which we focus is the deviation or growth cycle, where the underlying idea is that the business cycle can be identified as a cycle relative to a trend.
Thus, some kind of filter is required to provide a measure of the trend, and the cycle is identified as the deviation from this trend.
On this basis, we use the Hodrick and Prescott HP filter with the lambda value dampening factor set at 6. There remains a degree of controversy about the procedure, as exemplified most recently in the paper by Meyers and Winkerfollowing earlier papers by Harvey and JaegerBurnside and Canovaamong others.
The filter has been applied to the log of the GDP series for each country and the residual from it is identified as the cyclical deviate. The series of cyclical deviates form the focus of our analysis.
The period of the second wave of globalization appears to have much more synchronized cycles than the other two periods. They facilitate comparisons among the three periods from which we see some interesting results. Second, the variance is the largest in the bloc economy period. Many pairs have negative correlations while others display quite high positive correlations, even around 0. The data it contains are derived from the identification of turning points in the cyclical series.
This identification is achieved by using a suitably modified version of the Bry—Boschan algorithm. Although it is comparatively uncommon to date the turning points in annual series because of the perception that the aggregation to an annual frequency risks smearing the identification of the true say, monthly turning points across pairs of years, in our case we are less interested in precise dating than we are in the relative characteristics of the cycles in the different subsamples.
These characteristics can only be revealed after a dating of the peaks and troughs has been undertaken. The number of cycles identified for individual countries appears considerably larger, at over 10 on average, for the bloc economy period than for the other two periods, while the second globalization period hosts more cycles around 8 to 9 across the individual countries than the first globalization period. The expansion and recession probabilities shown are obtained as the proportion of the total time spent in expansion or recession; consistent with what we have just noted about the relatively greater length of the expansion phase in the bloc economy period, the expansion probability for that period is clearly larger than the probability of recession, whereas for the other two periods the probabilities appear about equal.
Thus, statistical verification is required. Here, we treat the data as matched. Second, we use the Mann—Whitney test Mann and Whitney, to confirm that the distributions are different. We assume two independent samples i.
Further confirmation was sought from an application of the Kolmogorov—Smirnov test. The largest difference between the distributions is 0. There is an extensive literature on this issue, largely instigated by Frankel and Roseand aimed initially at the issue of whether or not the advent of the eurozone could be expected to be associated with an increase in trade.
Frankel and Rose exploited this insight, which led to a large number of subsequent studies in a similar vein e. Rose, This proved to be extremely controversial; it became obvious that the relationship between trade, the cycle and currency unions was one fraught with problems of reverse causation: not that the initiators of this line of estimation were unaware of these hazards.
In this paper we can add a little to that debate. We use trade intensity to measure how tightly two countries are linked with each other through international trade.
Our trade intensity is measured by export intensity, defined as: where X i denotes total exports from country i and M i denotes total imports into country j. M W is total imports in the world. The higher the values of these indices the more closely are the two countries i and j linked by international trade. Turning to currency, we use a currency dummy to capture the effect of participation in a common currency union. If the two countries use common currency or two currency regimes are tightly linked, as, for example, some were in the s worldwide currency blocs, then dummies are unity, and zero otherwise.
To highlight the impact of a common currency, we focus on major currency unions among 21 countries i. Scandinavian currency union, Latin currency union in the first globalization era, gold bloc, Sterling area, Reichsmark bloc, US dollar area in the bloc economy era and the eurozone in the second globalization era.
See Appendix I for detail on the country components. Trade denotes export intensity between two countries. CU denotes the dummy of currency unions or common currency. If two countries i and j share the common currency at least once during the period, the dummy is unity, and zero otherwise. D denotes country dummies. More trade raises business cycle synchronization. Furthermore, the currency blocs, rather than trade intensity, definitely affect business cycle synchronization in the bloc economy period.
All the coefficients are large and much larger than those of trade intensities. In the second globalization era, the eurozone dummy is significantly positive, though the values of coefficients are generally smaller than those obtained for the bloc economy period. Although our estimation results are reasonable, we need to be careful about qualifications in our regression results.
An important issue is that of causality in relation to the currency union dummy. From this point of view, a positive sign on the currency union dummy reflects the presence of these prior conditions.
However, it may be that by joining a currency union, countries' business cycles come to be synchronized. To investigate this issue, we single out the euro area. The coefficient is 0. By contrast, during the bloc economy period which includes observations from the two world warsthe eurozone economies were largely pitted against each other and the euro dummy in this period is neither significant nor positive. These findings seem to demonstrate that, aside from the political distortions wrought by war, the economies of the eurozone have highly synchronized business cycles regardless of the physical presence of the euro; in this sense, it might be said that the eurozone was always a good candidate for the appellation optimal currency area.
While the previous section studied the impact of currency unions and blocs in Europe, this section turns to Asian business cycles. However, an investigation into the Asian business cycle synchronization is worthwhile when thinking of the future Asian monetary and currency system and of future economic integration in Asia.
As discussed in the previous section, based on historical patterns of business cycle synchronization, Europe seems to be a more coherent currency area than Asia. Specifically, questions arise as to whether Asian business cycle comovements existed in the late 19th century or early 20th century and whether Asia has seen any regional business cycle synchronization regardless of the absence of an explicit currency union, common currency and common monetary policies.
Similar to the previous section, we regress the following equation: 2 where Asia denotes Asian dummies. If two countries are Asian, according to our definition below, the dummy is unity, and zero otherwise. Thus, there are a variety of possible definitions of Asia. The second dummy involves a historical viewpoint. Since their colonies in Asia might be linked with European countries, and with large Asian countries, business cycles might be correlated among them.
This dummy is adopted for the estimation in the period of the bloc economy.
Empirical Economics. The aim of this paper is threefold. First, we analyze the comovements of business disney dating site news you techmeme newsweek in European regions. Second, we date these business cycles and identify clusters of regions with similar business cycle behavior, using Finite Mixture Markov models. Third, we develop a new index to measure within-country homogeneity. We find that comovement among regions is, on average, quite low, although it increased during the convergence process prior to the euro cash and after the onset of the Great Recession. We identify five different groups of European regions. We also find heterogeneity in the size of border effects. Gadea has received financial support from Funcas. Gomez Loscos and E. Bandres declare that they have no conflict of interest. This article does not contain any studies with human participants or animals performed by any of the authors. Skip to main content. Advertisement Hide. Empirical Economics pp 1—23 Cite as.
ECONOMIC CONSEQUENCES OF THE GREAT RECESSION
Use the link below to share a full-text version of this article with your friends and colleagues. Learn more. The business cycle is identified as the series of deviates from a Hodrick—Prescott filtered trend. Cyclical turning points are located in the business cycles of our sample of 21 major countries, which enables us to comment on the characteristics of business cycles in the three periods. Following the estimations by Frankel and Rose, we relate business cycle synchronization to trade patterns and currency unions. Consequently, we find that European integration was already discernible in terms of business cycle synchronization in the early s and that a similar synchronization was not discernible for Asia. Studies of these links are not new, but our paper capitalizes on some novel features that have not been exploited previously.
THE GREAT RECESSION IN ECONOMIC, POLITICAL, AND SOCIAL CONTEXTS
The business cyclealso known as the economic cycle or trade cycleis dating coach matt hussey shirtless cowboys dancing downward and upward movement of gross domestic product GDP around its long-term growth trend. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth expansions or booms and periods of relative stagnation or decline contractions or recessions. Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite the often-applied term cyclesthese fluctuations in economic activity do not exhibit uniform or predictable periodicity. The common or popular usage boom-and-bust cycle refers to fluctuations in which the expansion is rapid and the contraction severe. Sismondi found vindication in the Panic ofwhich was the first unarguably international economic crisis, occurring in peacetime [ citation needed ]. Sismondi and his contemporary Robert Owenwho expressed similar but less systematic thoughts in Report to the Committee of the Association for the Relief of the Manufacturing Poor, both identified the cause of economic cycles as overproduction and underconsumptioncaused in particular by wealth inequality. They advocated government intervention and socialismrespectively, as the solution. This work did not generate interest among classical economists, though underconsumption theory developed as a heterodox branch in economics until being systematized in Keynesian economics in the s.
The Great Recession of — created the largest economic upheaval in the United States since the Great Depression of the s. Although economic downturns are a recurring phenomenon, the most recent recession was exceptional in its duration and depth. It was the longest recession since the Great Depression. At eighteen months, from December to June , it exceeded the sixteen-month recessions of — and —; the average period from peak to trough of post—World War II recessions was The Great Recession was also especially severe; both GDP and number of jobs declined by about 6 percent and median family incomes declined by about 8 percent. The Great Recession was particularly worthy of its name because of the protracted slump in employment that followed even after the recession was officially over, as assessed on the basis of the dating procedure of the National Bureau of Economic Research.