Paper #1317
- Title:
- Slow recoveries: A structural interpretation
- Authors:
- Jordi GalĂ, Frank Smets and Rafael Wouters
- Date:
- May 2012
- Abstract:
- An analysis of the performance of GDP, employment and other labor market variables following the troughs in postwar U.S. business cycles points to much slower recoveries in the three most recent episodes, but does not reveal any significant change over time in the relation between GDP and employment. This leads us to characterize the last three episodes as slow recoveries, as opposed to jobless recoveries. We use the estimated New Keynesian model in Galí-Smets- Wouters (2011) to provide a structural interpretation for the slower recoveries since the early nineties.
- Keywords:
- jobless recoveries, U.S. business cycle, estimated DSGE models, Okun's law.
- JEL codes:
- E32
- Area of Research:
- Macroeconomics and International Economics
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