A1334
Title: Testing and quantifying economic resilience
Authors: Yohei Yamamoto - Hitotsubashi University (Japan) [presenting]
Abstract: A formal testing procedure is proposed to examine the resilience of an economy. The approach remains applicable even when a cross-section of the control group is unavailable and circumvents potential bias in time-series regressions using data that includes structural breaks. Measures of shock absorption and cumulative recovery are provided. Empirical analysis reveals that most of the advanced countries were not resilient to the global financial crisis, while many were so during the COVID-19 pandemic. Potential determinants of economic resilience, such as financial leverage and labor market regulation, may have negative correlations with these measures, and other determinants have heterogenous associations depending on the nature of the crisis.
