The question is do you believe that the US economy will eventually be at the same level of income, employment, and so that it would have been without a “great recession” or will just resume the same percent growth but from a lower base and never catch back up to where would have been as did Britan as shown?
Mark Thoma is impressed by the strength and reliability of the trend in U.S. real GDP growth:
Does This Ease Your Worries?: US GDP from 1870-2008: As you can see from this picture, historically we’ve always recovered from recessions. Eventually. But as you can also see from the Great Depression, recovery has not always been immediate…. I am confident that we’ll return to trend this time as well, the question is how long it will take us to get there. At this point — with the worrisome signs in recent data — it’s not looking to be anywhere near as fast as we’d like…. So we will get back to trend. But it will be awhile before we get there.
I, too, find the picture impressive. But the U.S. is exceptional. Other countries do not show the same pattern: for example, the United Kingdom never recovered to trend after its post-World War I recession.
And past performance is no guarantee of future results…
Does This Ease Your Worries?: it Eases Mark Thoma’s…
J. Bradford DeLong
Fri, 27 May 2011 16:02:17 GMT