The authors developed a typology of 20 types of economic shocks and an analytical framework for understanding the macroeconomic impacts of those shocks. They demonstrate how the typology and analytical framework can be used to anticipate recessions and consider appropriate policy responses, using the Great Recession (2007–2009) and the COVID-19 recession (2020) as case studies. Although these two recessions originated from financial and public health crises, they triggered many other shock types that compounded macroeconomic impacts. These recessions also prompted unprecedented and unconventional policy responses — shocks in themselves — that shaped recovery patterns. To the authors’ knowledge, this is the most comprehensive typology spanning real, financial, environmental, and policy aspects of the U.S. economy.
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