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The Disappointing Recovery of Output after 2009
Report

The Disappointing Recovery of Output after 2009

John G. Fernald, Robert E. Hall, James H. Stock and Mark W. Watson
FRBSF, 2017
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Editorial Rating

9

Qualities

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Recommendation

Even before the Great Recession, the US economy was pushing against substantial headwinds that continue to blow. Research from economists John G. Fernald, Robert E. Hall, James H. Stock and Mark W. Watson points to a structural downshift in total factor productivity and a drop in labor force participation as major contributors to the tepid output growth since the bottom of the recession in 2009. GetAbstract recommends this authoritative report to policy experts, economists and analysts seeking to better understand the dynamics behind the US post-crisis economy.

Summary

What should have been a robust US recovery from the deep downturn of the Great Recession has instead turned into plodding growth. Per capita business output in the post-recession period has underperformed its average in previous recoveries by 1.8 percentage points annually. Public sector demand deficits, resulting from cuts in federal and local government spending, explain part of the performance drag, as does weak business capital investment. However, anemic total factor productivity (TFP) growth – output that reflects technological efficiency – along with decreasing numbers of people in the workforce...

About the Authors

John G. Fernald is a senior research adviser at the Federal Reserve Bank of San Francisco. Robert E. Hall, James H. Stock and Mark W. Watson are professors at Stanford, Harvard and Princeton Universities, respectively.

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