Politická ekonomie
Politická ekonomie
Prague Economic Papers
University of Economics, Prague

Prague Economic Papers Vol. 22 No. 2

The Evaluation of Economic Recession Magnitude: Introduction and Application

DOI: https://doi.org/10.18267/j.pep.447

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Jiří Mazurek, Elena Mielcová

We propose a new quantitative recession magnitude scale for measuring recessions´ magnitudes (´strength´) derived from GDP growth rates during a recession and its duration. Furthermore, we introduce a qualitative scale with four recession categories: minor, major, severe and ultra, where the categories are defined by the magnitude scale. We use both scales to evaluate several well known economic recessions of the 20th and the 21st centuries. We have found that the Great Depression in 1929-1933 and recessions in Russia and Ukraine in the 1990s belong to ultra recessions, while the recent 2007-2009 fi nancial crisis falls mainly into major (EU and Japan) and severe (USA) category.

Keywords: business cycle, financial crisis, recession, recession classification, recession magnitude

JEL Classification: B49, E32, O57