The Global Financial Crisis (GFC) had a sharp impact on the global economy.

In advanced economies,
GDP fell importantly, and it has not recovered its previous trend. The GFC is deemed as a demand crisis,
however, its effects had permanent effects on GDP. Thus, the GFC (as well as other crisis) reject the
generally accepted view that demand shocks effects are temporary (see Cerra, Fatas, and Saxena (2021)
and Blanchard, Cerutti, and Summers (2015) for evidence about crisis and hysteresis on trend GDP).
Moreover, the magnitude of the crisis led to a change in monetary policy as advanced economies'
central banks reduced their monetary policy rate to the Effective Lower Bound (ELB, hereafter) to foster
the economy. As interest rate cuts were not feasible to stimulate economic activity due to the ELB,
advanced economies' central banks developed new monetary policies to stimulate the economy. After
the GFC, unconventional monetary policies (UMP) like quantitative easing (QE) and forward guidance
(FG) were heavily implemented. Bernanke (2020) provides an updated overview of these policies.

In this paper, we aim to answer two questions. First, we aim to establish the long-run effects of demand
and monetary policy shocks. Prior research suggests that the effects are sizable. For instance, Taylor et
al (2020) found that the hysteresis elasticity (the effect of the lag of the output gap on the PTF growth)
in the United States is about 0.28. Despite this, little is known about the hysteresis elasticity on other
advanced economies and its magnitude on emerging market economies. Our work contributes to this
debate by estimating a similar elasticity that measures the effect of the lag of the output gap on the
potential GDP growth. We estimate this elasticity for developed economies as well as emerging market
economies.

The second question is about the role of UMP during the GFC. In general, the literature about UMP can
be divided in two branches. In the first one there are studies about the direct effects of UMP in the local
economy (see \cite{WEALE201681} for the United States and the United Kingdom, \cite{Mouabbi} for
the Euro Area, and \cite{Wang} for Japan). In the second branch, the studies focus on the spillovers of
these policies in other economies. Within this second branch, there are manifold high-frequency studies
regarding the spillover effects on stock markets, interest rates, and exchange rates (see \
cite{LOMBARDISIKLOS}, \cite{MATRIX}, \cite{Gagnon} and \cite{BAUER201424}). A smaller part of this
branch studies the spillovers effects on macroeconomic variables like the current account, the financial
conditions, the exchange rate, and inflation (see \cite{Gagnon}, \cite{TILLMANN2016136}, \cite{DePolis}
and \cite{BABECKAKUCHARCUKOVA2016199}, respectively).

Our paper contributes to both branches of the literature. On the one hand, most papers evaluating the
role of UMP during the GFC (see \cite{WEALE201681} for the United States and the United Kingdom, \
cite{Mouabbi} for the Euro Area, and \cite{Wang} for Japan) do not explicitly state the role of potential
output hysteresis in their models. Thus, they could be underestimating the role of UMP during the GFC.
On the other hand, we contribute to literature of spillovers of UMP on macroeconomic variables by
using novel methods relying on a semi-structural model instead of time-series techniques. Previous
studies on the spillovers on UMP rely on time series methods like VARs or VEC (see \cite{GlobalVEC1}, \
cite{BABECKAKUCHARCUKOVA2016199} and \cite{HAldane}). However, time-series methodologies
impose several restrictions that make its estimation and the economic interpretation of the shocks
difficult (see \cite{LombardiSurvey}). The model we propose allows for theoretically consistent
identification of the effects of advanced economies' UMP on other economies.
In methodological terms, the present work also contributes to the global projection models literature
(see \cite{GPM6}, \cite{4GM}, \cite{Benes}, \cite{Andrle}, \cite{GOMEZPINEDA}) by including the role of
potential output hysteresis and the role of UMP in these models.