Economics @ ITT

Let it Bleed?

Posted in economics, macroeconomics by ittecon on March 30, 2013

In the 12 years of the Great Depression – between the stock-market crash of 1929 and America’s mobilization for World War II – production in the United States averaged roughly 15% below the pre-depression trend, implying a total output shortfall equal to 1.8 years of GDP. Today, even if US production returns to its stable-inflation output potential by 2017 – a huge “if” – the US will have incurred an output shortfall equivalent to 60% of a year’s GDP.

via Let it Bleed? by J. Bradford DeLong – Project Syndicate.

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