Proposal preview

Recovering from large scale crisis: strategies, patterns and outcomes, 19th-21th centuries

The intensity of a crisis can be measured either by the extent of the fall from peak to through or by the number of years required to recover pre-crisis levels. The present crisis, for instance, is very often analysed as a Great Recession, having in mind the breath-taking collapse of real GDP during the 2008-2009 biennia in many advanced economies, even though, nowadays, most of South European countries have not reached yet the real GDP per capita which they enjoyed in 2007. In fact, according with the duration criteria, a crisis which implied nearly one decade of under-utilization of productive capacity seems that can be better characterized as a great depression rather than a great recession.
Prolonged underutilization of productive capacity was recorded in other large scale crisis in several regions of the globe. Japan is suffering a long-term decline of its rate of growth since the early 1990s. Latin America experienced a “lost decade” for economic growth during the 1980s. The United States and Western Europe recorded stagnation throughout the 1970s. Most of the advanced and developing world suffered the worst contemporary collapse in banking, agriculture and manufacturing production during the Great Depression of the 1930s. The collapse of activity during First World War and its aftermath brought about dramatic agrarian crises, industrial slumps, bank bankruptcies and political turmoil in Latin America, Southern Europe and Southern Asia. Mediterranean economies suffered financial instability and long-lasting stagnation during the wave of globalization of the late 19th century. Southern and Far-East Asia experienced dramatic deflation and sustained de-industrialization during the first half of the 19th century. Mediterranean Europe was confronted with large-scale crisis since the late 18th century, when the Ancient Regime collapsed and the Napoleonic wars disturbed the previous patterns of trade.
The former cases suggest that large scale crises defined as a prolonged period of under-utilization of productive capacity have been rather frequent in long-term historical development. This session would like to permit scholars working in the field to present their recent research results, keeping in mind the following objectives.
First, further discussion is needed concerning the concept of large-scale crisis or great depression, which might be considered as synonymous. The organizers suggest prioritizing the number of years required for the recovery of pre-crisis levels as the key criteria for detecting them, but they are open to consider alternative measures.
Second, the session would like to contribute to highlight the debate about which are the best indicators to identify full-recovery after great depression. For recent large scale crises there is a rather substantial range of indicators which can be used: GDP, human developement index, height, agrarian product, industrial product, real financial assets, market shares and business’ rates of profit. In any case, alternative measures such as demographic indicators, urbanization rates or real wages might be also considered as consistent alternatives.
Third, large scale crises usually derive from a combination of shocks which might be worthwhile to further analyse. A paramount role in most of large crises was performed by previous periods of financial speculation and massive borrowing by firms, families and governments. But in other depressions the departing point might also be ecological catastrophes, the outburst of war or the new ways of globalization in world market caused by the diffusion of innovation in transports and communication.
Fourth, the impact of great depressions was not even in all productive sectors. According to some interpretations, primary commodities deflation or banking bankruptcies might be the critical stage to convert a current crisis in a prolonged depression. Similarly, during the phase of recovery different industries might have an uneven role in promoting the definitive overcoming of the depression.
Last but not least, both governments and firms had to select sustainable strategies to cope with the depression. The session would discuss which types of policies were adopted by governments to deal with prolonged crises and their outcomes. It might also take into consideration the degree of success of firm’s strategies followed at the firms’ level. Finally, macroeconomic mechanisms of adjustment which contributed to underpin full recovery would also be analysed.

Organizer(s)

  • Jordi Catalan, Universitat de Barcelona, jordi.catalan@ub.edu,
  • Maria Eugenia Mata, Universidade Nova de Lisboa, memata@novasbe.pt,

Session members

  • Maria Eugenia Mata, Universidade Nova de Lisboa, memata@novasbe.pt
  • Jordi Catalan, University of Barcelona, jordi.catalan@ub.edu
  • Michalis Psalidopoulos, University of Athens/IMF, mpsal@econ.uoa.gr
  • Bernard C. Beaudreau, Université Laval, Québec, bernard.beaudreau@ecn.ulaval.ca
  • Richard Sylla, New York Stern School of Business, rsylla@stern.nyu.edu
  • John V. Duca, Federal Reserve Bank of Dallas & Southern Methodist University, Dallas, john.v.duca@dal.frb.org
  • Francesco Chiapparino, Università Politecnica delle Marche , f.chiapparino@univpm.it
  • Claudio Belini, CONICET-University of Buenos Aires , cfbelini@hotmail.com
  • Ramon Ramon-Muñoz, Universitat de Barcelona, ramon@ub.edu
  • Aiko Ikeo, Waseda University, Tokio, aikoikeo@waseda.jp
  • Riccardo Semeraro, Università di Verona, riccardo.semeraro@univr.it

Proposed discussant(s)

  • Youssef Casis, European University Institute, Youssef.Cassis@EUI.eu
  • Bernard C. Beaudreau, Université Laval, Québec, bernard.beaudreau@ecn.ulaval.ca
  • John V. Duca, Federal Reserve Bank of Dallas & Southern Methodist University, Dallas, john.v.duca@dal.frb.org
  • Maria Eugenia Mata, Uinversidade Nova de Lisboa, memata@novasbe.p
  • Jordi Catalan, Universitat de Barcelona, jordi.catalan@ub.edu
  • Claudio Belini, CONICET-University of Buenos Aires , cfbelini@hotmail.com
  • Ioanna Sapho Pepelasis, Athens University of Economics and Business, ipepelasis@aueb.gr
  • Michalis Psalidopoulos, University of Athens/IMF, mpsal@econ.uoa.gr
  • Aiko Ikeo, Waseda University, Tokio, aikoikeo@waseda.jp
  • Ramon Ramon-Muñoz, Universitat de Barcelona, ramon@ub.edu
  • Richard Sylla, New York Stern School of Business, rsylla@stern.nyu.edu