The Disappointing Recovery of Output after 2009

John G. Fernald, Robert E. Hall, James H. Stock, Mark W. Watson

NBER Working Paper No. 23543
Issued in June 2017
NBER Program(s):Economic Fluctuations and Growth, Labor Studies

U.S. output has expanded only slowly since the recession trough in 2009, even though the unemployment rate has essentially returned to a pre-crisis, normal level. We use a growth-accounting decomposition to explore explanations for the output shortfall, giving full treatment to cyclical effects that, given the depth of the recession, should have implied unusually fast growth. We find that the growth shortfall has almost entirely reflected two factors: the slow growth of total factor productivity, and the decline in labor force participation. Both factors reflect powerful adverse forces that are largely unrelated to the financial crisis and recession—and that were in play before the recession.

Supplementary materials for this paper:

• data appendix

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23543

Published: John G. Fernald & Robert E. Hall & James H. Stock & Mark W. Watson, 2017. "The Disappointing Recovery of Output after 2009," Brookings Papers on Economic Activity, vol 2017(1), pages 1-81. citation courtesy of