Economic Scarring: Channels and Policy Implications – International Monetary Fund

The IMF Press Center is a password-protected site for working journalists.
Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.
Modify your profile
. Nujin Suphaphiphat ; Yu Shi
Publication Date:
December 9, 2022
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
This paper documents the existence of medium-to-long term output losses following large crises using panel data that cover 192 countries from 1970 to 2015 and shows that the magnitudes of economic scarring depend on the nature of the shock, economic activity, and pre-crisis conditions. It also provides a thorough review of potential channels that can lead to scarring and presents novel empirical evidence on the significance of supply-side channels using cross-country sectoral-level data. Finally, the paper discusses policy implications based on the empirical findings.
Working Paper No. 2022/248
Publication Date:
December 9, 2022
Stock No:
Please address any questions about this title to
© 2022 International Monetary Fund. All rights reserved.


Leave a Reply

Your email address will not be published. Required fields are marked *