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Economic Recovery

How quickly do economies recovery after recessions? The answer depends on the nature of the recession i.e., whether the recession was caused by a financial crisis or not. Schularick and Taylor, using data for advanced economies over 140 years, find that financial-crisis recessions are more painful than normal recessions and that the intensity of credit creation in the boom phase of the cycle is related to the severity of the subsequent crisis. You can read their VOX piece here and paper here.
 
Reinhart and Rogoff have also addressed this issue on VOX - click here.  John Taylor challenges their finding here.  

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