The Experts below are selected from a list of 28626 Experts worldwide ranked by ideXlab platform
Amir Sufi - One of the best experts on this subject based on the ideXlab platform.
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the Great Recession lessons from microeconomic data
Social Science Research Network, 2010Co-Authors: Atif Mian, Amir SufiAbstract:We highlight how a micro-level analysis of the Great Recession provides us with important clues to understand the origins of the crisis, the link between credit and asset prices, the feedback effect from asset prices to the real economy, and the role of household leverage in explaining the downturn. We hope that our discussion also serves as an example of the usefulness of incorporating microeconomic data and techniques in answering traditional macroeconomic questions.
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the Great Recession lessons from microeconomic data
The American Economic Review, 2010Co-Authors: Atif Mian, Amir SufiAbstract:Crises and sharp economic downturns, while undesirable, provide economists with a unique opportunity to test and hone economic theory. Indeed, some of the most influential advance ments in economic thought, including Milton Friedman’s monetarist tradition, John Maynard Keynes’ fiscal theory, and Irving Fisher’s debtdeflation hypothesis, emerged from analysis of the Great Depression. The current economic malaise, which we refer to as “The Great Recession,” provides another watershed moment to reevaluate our core economic beliefs. However, in contrast to our peers in previous crises, we are fortunate to have access to large-scale microeconomic datasets and advancements in computational capacity. These advantages allow for a more rigorous analysis of the current Recession and therefore a more informed understanding of its origins, propagation, and consequences. Our purpose is to highlight how a micro-level analysis of the Great Recession provides us with important clues to understand the origins of the crisis, the link between credit and asset prices, the feedback effect from asset prices to the real economy, and the role of household leverage in explaining the downturn. We hope that our discussion also serves as an example of the useful ness of incorporating microeconomic data and techniques in answering traditional macroeco nomic questions. I. What Were the Origins of the Credit Cycle: Credit Demand or Credit Supply?
Patrick J Kehoe - One of the best experts on this subject based on the ideXlab platform.
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on the importance of household versus firm credit frictions in the Great Recession
Review of Economic Dynamics, 2020Co-Authors: Patrick J Kehoe, Virgiliu Midrigan, Pierlauro Lopez, Elena PastorinoAbstract:Abstract Although a credit tightening is commonly recognized as a key determinant of the Great Recession, to date, it is unclear whether a worsening of credit conditions faced by households or by firms was most responsible for the downturn. Some studies have suggested that the household-side credit channel is quantitatively the most important one. Many others contend that the firm-side credit channel played a crucial role. We propose a model in which both channels are present and explicitly formalized. Our analysis indicates that the household-side credit channel is quantitatively more relevant than the firm-side credit channel. We then evaluate the relative benefits of a fixed-sized transfer to households and to firms that improves each group's access to credit. We find that the effects of such a transfer on employment are substantially larger when the transfer targets households rather than firms. Hence, we provide theoretical and quantitative support to the view that the employment decline during the Great Recession would have been less severe if instead of focusing on easing firms' access to credit, the government had expended an equal amount of resources to alleviate households' credit constraints.
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on the importance of household versus firm credit frictions in the Great Recession
Social Science Research Network, 2020Co-Authors: Patrick J Kehoe, Virgiliu Midrigan, Pierlauro Lopez, Elena PastorinoAbstract:Although a credit tightening is commonly recognized as a key determinant of the Great Recession, to date, it is unclear whether a worsening of credit conditions faced by households or by firms was most responsible for the downturn. Some studies have suggested that the household-side credit channel is quantitatively the most important one. Many others contend that the firm-side channel played a crucial role. We propose a model in which both channels are present and explicitly formalized. Our analysis indicates that the household-side credit channel is quantitatively more relevant than the firm-side credit channel. We then evaluate the relative benefits of a fixed-sized transfer to households and to firms that improves each group’s access to credit. We find that the effects of such a transfer on employment are substantially larger when the transfer targets households rather than firms. Hence, we provide theoretical and quantitative support to the view that the employment decline during the Great Recession would have been less severe if instead of focusing on easing firms’ access to credit, the government had expended an equal amount of resources to alleviate households’ credit constraints.
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evolution of modern business cycle models accounting for the Great Recession
Research Papers in Economics, 2018Co-Authors: Patrick J Kehoe, Virgiliu Midrigan, Elena PastorinoAbstract:Modern business cycle theory focuses on the study of dynamic stochastic general equilibrium models that generate aggregate fluctuations similar to those experienced by actual economies. We discuss how this theory has evolved from its roots in the early real business cycle models of the late 1970s through the turmoil of the Great Recession four decades later. We document the strikingly different pattern of comovements of macro aggregates during the Great Recession compared to other postwar Recessions, especially the 1982 Recession. We then show how two versions of the latest generation of real business cycle models can account, respectively, for the aggregate and the cross-regional fluctuations observed in the Great Recession in the United States.
Alp Simsek - One of the best experts on this subject based on the ideXlab platform.
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investment hangover and the Great Recession
American Economic Journal: Macroeconomics, 2018Co-Authors: Matthew Rognlie, Andrei Shleifer, Alp SimsekAbstract:We present a model of investment hangover motivated by the Great Recession. Overbuilding of durable capital such as housing requires a reallocation of productive resources to other sectors, which is facilitated by a reduction in the interest rate. When monetary policy is constrained, overbuilding induces a demand-driven Recession with limited reallocation and low output. Investment in other capital initially declines due to low demand, but it later booms and induces an asymmetric recovery in which the overbuilt sector is left behind. Welfare can be improved by ex post policies that stimulate investment (including in overbuilt capital) and ex ante policies that restrict investment.
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investment hangover and the Great Recession
Social Science Research Network, 2014Co-Authors: Matthew Rognlie, Andrei Shleifer, Alp SimsekAbstract:We present a model of investment hangover motivated by the Great Recession. In our model, overbuilding of residential capital requires a reallocation of productive resources to nonresidential sectors, which is facilitated by a reduction in the real interest rate. If the fall in the interest rate is limited by the zero lower bound and nominal rigidities, then the economy enters a liquidity trap with limited reallocation and low output. The drop in output reduces nonresidential investment through a mechanism similar to the acceleration principle of investment. The burst in nonresidential investment is followed by an even Greater boom due to low interest rates during the liquidity trap. The boom in nonresidential investment induces a partial and asymmetric recovery in which the residential sector is left behind, consistent with the broad trends of the Great Recession.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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investment hangover and the Great Recession
Research Papers in Economics, 2014Co-Authors: Matthew Rognlie, Andrei Shleifer, Alp SimsekAbstract:We present a model of investment hangover motivated by the Great Recession. Over-building of durable capital such as housing requires a reallocation of productive resources to other sectors, which is facilitated by a reduction in the interest rate. If monetary policy is constrained, overbuilding induces a demand-driven Recession with limited reallocation and low output. Investment in other capital initially declines due to low demand, but later booms and induces an asymmetric recovery in which the overbuilt sector is left behind. Welfare can be improved by ex-post policies that stimulate investment (including in overbuiltcapital), and ex-ante policies that restrict investment.
Till Von Wachter - One of the best experts on this subject based on the ideXlab platform.
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unemployment insurance and disability insurance in the Great Recession
Journal of Labor Economics, 2016Co-Authors: Andreas I Mueller, Jesse Rothstein, Till Von WachterAbstract:Social Security Disability Insurance (SSDI) awards rise during Recessions. If marginal applicants are able to work but unable to find jobs, countercyclical Unemployment Insurance (UI) benefit extensions may reduce SSDI uptake. Exploiting UI extensions in the Great Recession as a source of variation, we find no indication that expiration of UI benefits causes SSDI applications and can rule out effects of meaningful magnitude. A supplementary analysis finds little overlap between the two programs' recipient populations: only 28% of SSDI awardees had any labor force attachment in the prior calendar year, and of those, only 4% received UI.
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unemployment insurance and disability insurance in the Great Recession
Research Papers in Economics, 2013Co-Authors: Andreas I Mueller, Jesse Rothstein, Till Von WachterAbstract:Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their Unemployment Insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI applications. Our estimates are sufficiently precise to rule out effects of meaningful magnitude.
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unemployment insurance and disability insurance in the Great Recession
Social Science Research Network, 2013Co-Authors: Andreas I Mueller, Jesse Rothstein, Till Von WachterAbstract:Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their Unemployment Insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI applications. Our estimates are sufficiently precise to rule out effects of meaningful magnitude.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Alexander Strand - One of the best experts on this subject based on the ideXlab platform.
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the effect of economic conditions on the disability insurance program evidence from the Great Recession
Journal of Public Economics, 2021Co-Authors: Nicole Maestas, Kathleen J Mullen, Alexander StrandAbstract:Abstract We examine the effect of job displacement during the Great Recession on the Social Security Disability Insurance (SSDI) program. Exploiting variation in the severity and timing of the Recession across states, we estimate the effect of unemployment on SSDI applications and awards. We find the Great Recession induced nearly one million SSDI applications that otherwise would not have been filed, of which 41.8% were awarded benefits, resulting in over 400,000 new beneficiaries who made up 8.9% of all SSDI entrants between 2008 and 2012. More than one-half of the Recession-induced awards were made on appeal. The induced applicants had less severe impairments than the average applicant. Only 9% had the most severe, automatically-qualifying impairments, 33% had functional impairments and no transferable skills, and the rest were denied for having insufficiently severe impairments and/or transferable skills. Our estimates imply the Great Recession increased claims processing costs by $2.960 billion during 2008–2012, and SSDI benefit obligations by $55.730 billion in present value, or $97.365 billion including both SSDI and Medicare benefits.
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the effect of economic conditions on the disability insurance program evidence from the Great Recession
Social Science Research Network, 2018Co-Authors: Nicole Maestas, Kathleen J Mullen, Alexander StrandAbstract:We examine the effect of cyclical job displacement during the Great Recession on the Social Security Disability Insurance (SSDI) program. Exploiting variation in the severity and timing of the Recession across states, we estimate the effect of unemployment on SSDI applications and awards. We find the Great Recession induced nearly one million SSDI applications that otherwise would not have been filed, of which 41.8 percent were awarded benefits, resulting in over 400,000 new beneficiaries who made up 8.9 percent of all SSDI entrants between 2008-2012. More than one-half of the Recession-induced awards were made on appeal. The induced applicants had less severe impairments than the average applicant. Only 9 percent had the most severe, automatically-qualifying impairments, 33 percent had functional impairments and no transferable skills, and the rest were denied for having insufficiently severe impairments and/or transferable skills. Our estimates imply the Great Recession increased claims processing costs by $2.960 billion during 2008-2012, and SSDI benefit obligations by $55.730 billion in present value, or $97.365 billion including both SSDI and Medicare benefits.
