Growth dynamics: The myth of economic recovery

This IMF Working Paper published on Monday 8 August uses panel data for a large number of countries, and finds that economic contractions are not followed by offsetting fast recoveries.

Trend output lost is not regained, on average. Wars, crises, and other negative shocks lead to absolute divergence and lower long-run growth, whereas we find absolute convergence in expansions. The output costs of political and financial crises are permanent on average and long-term growth is negatively linked to

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