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Accounting for the Great Recession in the UK: Real Business Cycles and Financial Frictions

Chadha, Jagjit S., Warren, James L. (2013) Accounting for the Great Recession in the UK: Real Business Cycles and Financial Frictions. Manchester School, 81 (S2). pp. 43-64. ISSN 1463-6786. (doi:10.1111/j.1467-9957.2012.02320.x) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.1111/j.1467-9957.2012.02320.x

Abstract

Using the business cycle accounting (BCA) framework, we examine the 2008–9 recession in the UK. The recession appears to have been mostly driven by shocks to the efficiency wedge in total production, rather than intertemporal (asset price) consumption. From an expenditure perspective this result is consistent with the large observed falls in both consumption and investment. Simulated data from a dynamic stochastic general equilibrium (DSGE) model in which asset price shocks dominate finds no strong role for the intertemporal consumption wedge. This result implies that financial frictions work through more than just this channel.

Item Type: Article
DOI/Identification number: 10.1111/j.1467-9957.2012.02320.x
Additional information: Special Issue: Growth and Business Cycle in Theory and Practice. Proceedings of Centre for Growth and Business Cycle Research Conference, June 2011
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 29 May 2019 12:21 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40230 (The current URI for this page, for reference purposes)
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