Discussion of the paper: The way out of recessions: A forecasting analysis for some Euro area countries

摘要

The paper starts from the premise that standard SETAR models might not be appropriate for describing cyclical output dynamics, due to the fact that, in observed cyclical fluctuations, the speed of the recovery is affected by the intensity of the recession. This feature cannot be captured by a standard two-state SETAR model, but it can be given an economic interpretation as arising from the process of creative destruction taking place during recessions (the cleansing effect) and the consequent interaction between new entrepreneurial energies coming into play and the sluggishness of demand adjustments.