Wednesday, May 4, 2011

The Slowdown

I didn't document it, but back probably in the mid-1980s (at the library, doing economics stuff) I ran across a footnote or a brief note that some economists think we've been in a depression since the golden age ended in 1973.

It was one of those things you think about later and say, Gee, I wish I made a note of that.

Anyway, years later, during the Presidential campaign that put Bill Clinton in the White House, I came upon one of Ross Perot's graphs in his book United We Stand. The graph shows an astounding difference in economic growth before and after 1973 -- the same year that the library footnote associated with the onset of economic depression.

That lost reference is the reason I wrote "1973" on the Perot graph when first I saw it, and why I keep coming back to 1973 on this blog.

I would guess that Perot's numbers overstate the performance drop -- because the slower period includes both the severe 1974 recession and the severe double-dip of 1980-82. But even if we allow for overstatement, there must be a significant difference between the two periods. And come to think of it, those severe recessions did occur after 1973.

I am not the only one to dwell on the 1973 date. The slowdown is central in the work of Jazzbumpa and central to the analysis of Robert P. Brenner, for example.

So it is with disbelief that I read Noah's words: "Like David Beckworth, I am also more convinced of a Great Stagnation than I was before I looked at Fernald's data."