Crisis? What Crisis? Measuring Economic Crisis in Political Science

TY - JOUR

T1 - Crisis? What Crisis?

T2 - Measuring Economic Crisis in Political Science

AU - Krishnarajan, Suthan

PY - 2019

Y1 - 2019

N2 - An influential body of scholarship in political science has investigated the impact of economic crisis on various political outcomes. The vast majority of these studies rely on annual growth rates (AGR) to specify economic crisis. I argue that this canonical approach comes with several logical shortcomings. It leads to misguided impressions of crisis severity; it makes no distinction between rapid expansion years and rapid recovery years; and it disregards the financial dimension of economic crises. I present and discuss three alternative approaches of measuring economic crisis, imported from economics: economic shocks, economic slumps, and measures of financial crises. Examples from the regime instability literature demonstrate that these alternative crisis measurements provide results that are theoretically more nuanced and empirically more robust. On this basis, the article encourages researchers to pay more attention to the way they measure economic crisis in general and to supplement the AGR approach with alternative crisis measures in particular.

AB - An influential body of scholarship in political science has investigated the impact of economic crisis on various political outcomes. The vast majority of these studies rely on annual growth rates (AGR) to specify economic crisis. I argue that this canonical approach comes with several logical shortcomings. It leads to misguided impressions of crisis severity; it makes no distinction between rapid expansion years and rapid recovery years; and it disregards the financial dimension of economic crises. I present and discuss three alternative approaches of measuring economic crisis, imported from economics: economic shocks, economic slumps, and measures of financial crises. Examples from the regime instability literature demonstrate that these alternative crisis measurements provide results that are theoretically more nuanced and empirically more robust. On this basis, the article encourages researchers to pay more attention to the way they measure economic crisis in general and to supplement the AGR approach with alternative crisis measures in particular.

KW - Annual growth rates

KW - Economic crisis

KW - Measurement

U2 - 10.1007/s11135-018-0823-5

DO - 10.1007/s11135-018-0823-5

M3 - Journal article

SN - 0033-5177

VL - 53

SP - 1479

EP - 1493

JO - Quality and Quantity

JF - Quality and Quantity

IS - 3

ER -