Thursday, June 4, 2009

Good News from Casey Mulligan.

In his post of yesterday on Supply and Demand (in that order) here , Casey Mulligan compares the current recession track to that of 1980-1982. Each point represents GDP as a percent of its level three years before the end of the recession, which for the current one is assumed - provisionally - to take place in the third quarter of this year. Between 1979 and the end of 1982 two recessions in fact hit the U.S. economy. The current recession is not over yet but the red series give some senses of optimism, even though the fall has been more concentrated in time than the 1981 one. Mulligan cautiously adds:

“We do not know for sure when this recession will end, let alone whether it will be followed by a second recession. … but that does not change the fact that real GDP growth in much of the late 2000s was better than it was in the early 1980s.”

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