The text following Graph #3 of the earlier post today boldly presumes that the 1974 recession was substantially more severe than the 1970 and 1980 recessions.
Following a link from JzB's GDP Revisited - Part 1 to Calculated Risk turns up this graph:
The container article introduces GDI as the income-measurement version of GDP. (GDP is the output-measurement version; income equals output; but measurements are imperfect. The graph shows both GDI and GDP, and there are discrepancies.)
The graph...
...is constructed as a percent of the previous peak in both GDP and GDI. This shows when the indicator has bottomed - and when the indicator has returned to the level of the previous peak. If the indicator is at a new peak, the value is 100%.
For my purpose here, I'm looking at the bottoms. The low points. The graph shows clearly that (going back to 1959) the 1974 recession was substantially worse than any but the recent Great Recession -- at least when measured by the GDI. The 1982-83 recession comes in a distant third. The 1970 recession was among the mildest.
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The graph presents information in an unusual way. But I think it is a great way to show the severity of recessions.
2 comments:
And the blue bars give you an idea of the length of the recession. It's really the area under the curve that's important.
Employment growth trails in these recoveries, so the double recession of 80-82 was a long, miserable time for anyone caught up in it. In my dim recollection, it was a lot rougher going, all around than '74. Remember the first Chrysler bailout?
But that's not the whole story, either. GDP or GDI is aggregated, and tells you nothing about the detail. Who is hurt by the downturn, and how much?
That emphasizes the evil of the current situation. While the bulk of the population suffers, corporate profits have soared. What the hell kind of recession is that?
Sadly,
JzB
for reference...
the Calculated Risk link in the above post was the first time I ran across GDI, the income-based version of GDP.
The second time is at Economist's View today.
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