Long term Economic Impact of Crises: Are there beneficial effects of crises in the long term?

Countries which endure more frequent and more severe crises appear to perform better economically than countries which are less affected by crises. This paper provides empirical support for this statement. To do so this thesis documents the relationship between certain types of crises and the economy. There are five different crisis types defined, which are economic crises, currency crises, banking crises, sudden stops and sovereign debt crises. Whenever a crisis event occurs a single type or multiple types can be applied to it. It is found that economic crises and banking crises have a positive relationship with long term economic development. Meanwhile debt crises appear to have a negative impact on the economy on the long run, while sudden stops and currency crises give mixed results. Two mechanisms, "learning by mistake" and "purging of the economy", are coined in this thesis as ways to improve future growth via crises. These mechanisms appear to be especially prevalent in economic and banking crises, while for the other types of crises these mechanisms are not strong enough to overcome the initial loss due to a crisis event in the long run.