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Dec 15 2014

A Less Bouncy Ball

Since the end of the Great Recession, each year has started in familiar fashion. Overly optimistic expectations that the U.S. economy would soon reach “escape velocity” abound, based on the false premise that a vigorous revival is a given following deep recessions.

Describing the prevailing view on the global economic outlook from Davos last January, Ken Rogoff observed, “People are euphoric here, they think everything is going to be fantastic.” However, every year, these hopes have proven mistaken, with forecasters failing to come to terms with the underwhelming nature of the recovery.

Two months before the end of the Great Recession in 2009, while the consensus remained depressed, ECRI accurately forecast the end of the recession. Furthermore, one month later, ECRI predicted that “…the revival may not be as rapid as the depth of this downturn would otherwise suggest.”

While this is precisely what happened, why has the subpar pace of recovery been such a surprise? Our latest analysis takes a detailed look into the strength of recoveries following deep recessions, providing valuable insight into the ability of the U.S. economy to recoup its recessionary losses.

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Detailed Interview on our Approach

Real Vision TV December 5, 2014

Discussing ECRI's research approach, with comments on the outlook, in a 69 minute interview with Real Vision TV. More