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AER 2009 Reinhart and Rogoff

AER 2009 Reinhart and Rogoff

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Published by excel2007_norway
The Aftermath of Financial Crises by Carmen M. Reinhart and Kenneth S. Rogoff
The Aftermath of Financial Crises by Carmen M. Reinhart and Kenneth S. Rogoff

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Published by: excel2007_norway on Feb 19, 2010
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02/06/2013

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466  Aeran Eono Revew: Papers & Proeedngs 2009, 99:2, 466–472ttp://www.aeaweb.org/artles.pp?do
=
10.1257/aer.99.2.466 
A y , w ps  scl lysscp  u-up   2007 US subpcl css w  cs  bk css  vc cs scWl W II
(
R  R 2008
)
. Wsw  s cs   USs, suc s ss pc , s lv-, l sus cu ccu cs,  slw jcy  cc w,xb vully ll  ss   cuy  v   cl css—,  sv. I s pp, w    sl c-pv scl lyss  s cus    sysc bk css.I u l lyss, w lblyxclu  k cus  cps s,     pp   ypbl. A ll,  USs s  ly spsc lbl clc. W c vc cs pssblyv  c w  ks w cs  bk css? I c, s R R 
(
2008b
)
s,  c-s    bk css  ccus   ks v  su-ps u  c. T  blysl ps  us  quy pcs,uply, v vus, b. Fu,  qucy  cc css s   uc sclly, v cpss  l   ps–Wl
InternatIonal aspects of fInancIal-Market IMperfectIons
The Aftermath of Financial Crises
 By
Carmen M. Reinhart and Kenneth S. Rogoff *
W II p
(
pv   l-2000slbl cl css s k  ccu
)
.Tus, s suy     svcl css clus  ub  c k css  xp  lvs  cps. Als clu   c-pss  w pw vlp cuypss  wc w v us pc  lv .Bly spk, cl css  p-c s. M   ,  -  sv cl css s ccscs.
Frst,
ss k cllpss p  pl. Rl us pccls v 35 pc sc v sxys, wl quy pc cllpss v 55pc v  wu  bu   l ys.
Seond,
 
   bkcss s ssc w pu cls upu  ply. T uply ss  v  7 pc psv  w ps   cycl, wc lss v v u ys. Oupu lls
(
pk  u
)
 v  v 9 pc,lu  u   wu, v- uly w ys, s csbly s  uply.
Trd,
 l vlu v b s  xpl, s v  86 pc   j ps–WlW II pss. Isly,   cus b xplss s   wly c css bl u  cplz  bksys. Aly, blu css  cul su,   s csbl vc ss  cp sus. Buv upp-bu ss pl x  culsu ss  publc b. I c,  bvs  b css   vbl cl-lps  x vus  vs su  wk  p  pl upu cc-s, s wll s  bus cucyclclscl plcs  vc cs    wu.
 Dsussants:
P-Olv Gucs, Uvsy Cl-Bkly; Aw Aks, Uvsy  Cl-Ls Als; Jsu Az, Uvsy  Cl-S Cuz.* R: Scl  Publc Plcy  Dp Eccs, 4105 V Muc Hll, Uvsy  Myl, Cll Pk, MD 20742 (-l: c@u.u); R: Eccs Dp, 232 LuC, Hv Uvsy, Cb MA 02138–3001(-l: k@v.u). T us wul lk k P-Olv Gucs  Vc R. R lpul cs.
 
VOL. 99 NO. 246ThE AFTERmATh OF FiNANciAL cRiSES
I. The Historical Comparison Group
R  R 
(
2008
)
clu ll j psw bk css   vlpwl
(
 l  18
)
 pu pcul pss  s ubb “ b v”
(
Sp 1977,Nwy 1987, Fl 1991, Sw 1991, Jp 1992
)
. I s w by c  ps US cl css s sv by y -c. As  sul, w w cus ly  sysccl css, clu  “b v” vl-p cy css plus  ub  us k pss:  1997–1998 Ascss
(
H K, Is, K, Mlys, Plpps,  Tl
)
; Clb 1998; A 2001. Ts  css w wv ll  s   lv   llw u cpss. Cl   ly-ss s scl us pc , wc c bcul  b   ccl  ssss ps ps.
1
W ls clu w -l scl css  wc w v uspcs, Nwy  1899   U Ss 1929.
II. The Downturn after the Crisis:A Comparison of Depth and Duration
Fu 1 lks   bus ps  us- pc cycls suu bk css,
1
I R  R 
(
2008b
)
, w lk  clcss  66 cus v 200 ys, psz b pllls bw  ks  vlpcus, clu,  xpl,  ly uvsl u-up  v b.
Figure 1. Past and Ongoing Real House Price Cycles and Banking Crises:Peak-to-Trough Price Declines (
left panel
) and Years Duration of Downturn (
right panel
)
 Notes:
Ec bk css ps s  by cuy   b y   css. Oly j
(
sysc
)
bk- css pss  clu, subjc   ls. T scl v p s  clu  csspss. F   pss,  clculs  bs   u  llw ps: Ocb 2008, ly, Icl  Il; 2007, ully,  Huy;  2008:III, quly,  ll s. Csu pc cs  us  l us pcs.
Soures:
R  R 
(
2008b
)
 sucs c .
6050403020100Hong Kong, 1997Philippines, 1997Colombia, 1998Finland, 1991Indonesia, 1997Norway, 1987Japan, 1992Historical averageSpain, 1977Sweden, 1991US, 2007Argentina, 2001Norway, 1899Ireland, 2007Korea, 1997Thailand, 1997Malaysia, 1997Iceland, 2007UK, 2007US,1929Hungary, 2008Austria, 2008
Percent decline
–35.5 percentOngoing05101520
12345678910111213141516171819202122
Duration in years
6 years
 
 mAY 2009468 AEA PAPERS AND PROcEEDiNGS
 clu  cu ps   USs   ub   cus wxpc bk css: Aus, Huy,Icl, Il, Sp,   U K.O css   l s; ps css  k s. T cuulv cl l us pcs  pk  u v-s 35.5 pc.
2
T s sv l us- pc cls w xpc by Fl, Plpps, Clb,  H K.T css w v 50 pc, su pk  u. T us pc clxpc by  U Ss   u cu ps
(
ls 28 pc cc-   Cs–Sll x
)
s ly 
2
T scl v, wc s s  blck  , s  clu   css.
 wc  s   US u G Dpss.Nbly,  u  us pc clss qu l-lv, v uly sx ys.Ev xclu  xy xpc Jp
(
w s 17 cscuv ys  pccls
)
,  v s v v ys.As Fu 2 lluss,  quy pccls  ccpy bk css  sp   us pc cls,  sw s lv. T s u   wu w cp w l spcs s css w  bsv quy pcs   lss l. T vscl cl  quy pcs s 55.9 pc,w  wu ps   cycl ls 3.4ys. Nbly, u  cu cycl, Icl Aus v ly xpc pk--u quy pc cls  xc v   scl cps up.
Figure 2. Past and Ongoing Real Equity Price Cycles and Banking Crises:Peak-to-Trough Price Declines (
left panel
) and Years Duration of Downturn (
right panel
)
 Notes:
Ec bk css ps s  by cuy   b y   css. Oly j
(
sysc
)
bk- css pss  clu subjc   ls. T scl v p s  clu  csspss. F   pss,  clculs  bs   u Dcb 2, 2008. Csu pc cs us   l quy pcs.
Soures:
R  R 
(
2008b
)
 sucs c .
–100.0 –90.0 –80.0 –70.0 –60.0 –50.0 –40.0 –30.0 –20.0 –10.0 0.0
Iceland, 2007Thailand, 1997Austria, 2008Korea, 1997Indonesia, 1997Malaysia, 1997Spain, 1977Colombia, 1998US, 1929Finland, 1991Japan, 1992Ireland, 2007Philippines, 1997Historical averageHungary, 2008Spain, 2008US, 2007UK, 2007Sweden, 1991Norway, 1987Hong Kong, 1997Argentina, 2001Norway, 1899
Percent decline
55.9 percent
Ongoing crisesPast crises
n.a.0123456
1234567891011121314151617181920212223
Duration in years
3.4 years

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