Template-type: ReDIF-Paper 1.0
Author-Name: Bluhm, Richard
Author-Email: bluhm@merit.unu.edu
Author-Workplace-Name: UNU-MERIT / MGSoG
Author-Name: De Crombrugghe, Denis
Author-Email: d.decrombrugghe@maastrichtuniversity.nl
Author-Workplace-Name: School of Business and Economics, Maastricht University
Author-Name: Szirmai, Adam
Author-Email: szirmai@merit.unu.edu
Author-Workplace-Name: UNU-MERIT / MGSoG
Title: Do weak institutions prolong crises? : On the identification, characteristics, and 
	 duration of declines during economic slumps
Abstract: This paper defines economic slumps as a sequence of structural breaks 
	 exhibiting a specific pattern. We identify 58 such episodes between 1950 
	 and 2008 among a large sample of countries, and then examine the phases 
	 of decline. In several countries declines last extremely long, and we 
	 suggest several likely contributing factors. We find evidence of weak 
	 institutions before the crisis hits and, interestingly, of positive 
	 reforms thereafter. Strong institutions shorten the duration of crises, 
	 ethnic cleavages do the reverse. However, the detrimental effects of 
	 ethnic cleavages are not insurmountable: an interaction effect suggests 
	 they can be offset by appropriate institutions.
Classification-JEL: O43, O11, C41, F43
Keywords: economic slumps, crises, institutions, structural breaks, duration analysis 
Series: UNU-MERIT Working Papers
Creation-Date: 20131231
Number: 069
File-URL: http://www.merit.unu.edu/publications/wppdf/2013/wp2013-069.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2013069