Hie Joo Ahn, Yunjong Eo, and Lucas MoyonThis note evaluates recession risks at the national and state levels using a state-of-the-art Bayesian Markov-switching model that distinguishes between full-recovery recessions...
Overview
FEDS Note: Assessing Recession Risks with State-Level Data. Hie Joo Ahn, Yunjong Eo, and Lucas MoyonThis note evaluates recession risks at the national and state levels using a state-of-the-art Bayesian Markov-switching model that distinguishes between full-recovery recessions (U-shaped recessions) and those that generate lasting damage, or hysteresis (L-shaped recessions). While states exhibit considerable heterogeneity in their business-cycle experiences, most saw some degree of hysteresis in the past recessions that occurred prior to the COVID pandemi
