HKS Affiliated Authors
Professor of Public Policy, HKS; Harold Hitchings Burbank Professor of Political Economy, FAS
Excerpt
Excerpt
The Disappointing Recovery of Output after 2009. James Stock, March 10, 2017, Paper, "U.S. output has been expanding only slowly since the recession trough in 2009 even though unemployment has declined as fast as previous recoveries. We use a quantitative 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: TFP has grown slowly and labor force participation fell. Both factors reflect powerful adverse forces largely—if not entirely—unrelated to the financial crisis and the U.S. recession. Indeed, these forces fairly clearly were in play before the recession. The noncyclical forces we study resulted in a shortfall of capital formation that holds back output even today." Link