The WSJ and the Commerce Department realize what everyone else already knew. The recession was deeper — and subsequent recovery slower — than the government originally estimated, the Commerce Department said Friday.

Second quarter real GDP was reported to have increased at a 2.4% rate so that the four quarter growth was 3.2%. As the chart shows this is a very weak first year of recovery compared to the old historic norm before the “great moderation” emerged when growth averaged 7.6% in the first year of recovery. […]

Robert Waldmann I thought the only thing she knew was that she is a libertarian. Now I realize she doesn’t even know what the word “libertarian” means. She wrote Will the new head of the CFPA crack down on mortgages that offer prepayment options? [skip] Of course not. There is no constituency for such a […]

Hat tip Calculated Risk for the Alan Blinder and Mark Zandi paper How the Great Recession Was Brought to an End.

Michael Boskin writes that double dip downturns are more the rule than the exception.http://www.project-syndicate.org/commentary/boskin10/English I find this to be a very misleading article. What he is writing about is what happens in an actual recession when sometimes real GDP does bounce up for one quarter before resuming its fall. But that is not the impression […]

by Bruce Webb One raging argument that needs to be settled by the end of this year is what to do about the sunsetting of Bush tax cuts. Now it seems there are three general end points here: one, do nothing and they all expire at year’s end; two, extend them all, perhaps permanently; or […]

The sarcasm of the title of my recent post notwithstanding, there are some things economists understand to be true that are. Among those: People respond to incentives As with the Supreme Court, economists extend this principle to organizations, on the (generally correct) idea that organizations are made up of people who act in their own […]

This recession caused a severe disruption in the labor market for teen employment. The chart below illustrates the unemployment rate alongside the employment-to-population ratio for those aged 16-19 years. The visual is quite striking: at the peak of the business cycle, December 2007, the difference between the employment-to-population ratio over the unemployment rate was roughly […]

Robert Waldmann Brad DeLong and Paul Krugman consider the increase in the number of job vacancies to be bad news — to be a sign that long term unemployment has made it hard to increase employment even if there are vacant jobs. The high vacancies are held to be a sign of a problem which […]