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Debt and Depth of Recessions

Publication | April 2019
Debt and Depth of Recessions

This paper empirically investigates the relationship between the speed of the buildup of private debt—household and corporate debt—and the depth of recessions.

To do this, it differentiates between financial recessions and normal recessions on the basis of the speed of the debt buildup. It finds that financial recessions are deeper than normal recessions in advanced economies and that the differences become more pronounced when emerging market economies are added to the sample. It finds that the buildup of corporate debt—and not just household debt—can worsen recessions, especially in emerging market economies.


  • Introduction
  • Data and Summary Statistics
  • Empirical Methodology
  • Empirical Results
  • Conclusion
  • Appendix