Wednesday, September 05, 2012

Why Has Economic Recovery Been So Slow?

Economists John Taylor (Stanford) and Russ Roberts (George Mason) take a look at the numbers behind recovery from the recent recession compared to those of the past.
According the National Bureau of Economic Research, the US economy recovered from the recession at the beginning of the summer of 2009. Yet the recovery has been disappointing when compared to other recoveries. In this episode of the Numbers Game, John Taylor of Stanford University talks with host Russ Roberts about the nature of the recovery. How does it compare historically to other recoveries? How can we measure the pace of the recovery? The conversation ends with a discussion of possible explanations for why the recovery has been disappointing.



Below are links to data and papers referenced in the conversation:
1. 2008-09 and 1981-1982 Recession & Recovery Charts:
Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from BEA.gov - http://research.stlouisfed.org/fred2/series/GDPC1/
Potential GDP (GDPPOT) downloaded from FRED 7/13/12, taken from CBO.gov - http://research.stlouisfed.org/fred2/series/GDPPOT/

2. 1907-08 and 1893-94 Recession & Recovery Charts:
GDP data from NBER, compiled by Nathan Balke and Robert Gordon with adjustments by John Taylor for comparability with earlier charts -http://www.nber.org/data/abc/ Potential GDP calculations by John Taylor using a Hodrick-Prescott trend.

3. The Plucking Model Working Paper:
The "Plucking Model" of Business Fluctuations Revisited by Milton Friedman Working Papers in Economics, E-88-48 -- Hoover Institution, Stanford University
http://hoohila.stanford.edu/workingpapers/getWorkingPaper.php?filename=E-88-48.pdf

4. Growth Rate of Real GDP Chart:
Growth Rate calculated from Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from BEA.gov - http://research.stlouisfed.org/fred2/series/GDPC1/

5. Change in the Percentage of the Population that is Working Chart:
Employment-Population Ratio (EMRATIO) downloaded from FRED 7/13/12, taken from BLS.gov - http://research.stlouisfed.org/fred2/series/EMRATIO/

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