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Third-party-funded project

Title:
Business Cycles, Recessions and Labour Economics

Project management at the University of Würzburg:

Participating scientists:

Abstract:
The recurrent occurrence of recessions is a known phenomenon of market economies. Still there are many disputes and disagreements about this topic. To begin with, there is not even a common agreement about what exactly is meant by the term "recession" - time periods with absolute declines of real GDP, with negative deviations from a (however determined) growth trend or rather more generally with decreasing growth rates? Is real GDP the only variable of interest or is it rather a set of macroeconomic series, including e.g. real income, employment, industrial production, and wholesale-retail sales? There is not much agreement about the reasons of recessions, neither. Popular but still controversial suggestions have been, among others, real shocks and monetary policy.

As recessions are times of economic and social severities, there is the need to understand their reasons and dynamics. In a first step, facts about recessions are collected and the different methods used in literature to recreate historic recessions evaluated. Secondly, the gained knowledge shall be used for own considerations and models.

A further focus is on the relationship between (un)employment and recessions. Typically recessions are characterised as times with high unemployment. The causal direction of this observation shall be analysed to answer the question whether job-reallocation and in this context search unemployment could be a piece in the puzzle to explain the origin of recessions.

Projekt period: since 01.2005