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Federal Reserve Bank of San Francisco
Working Paper Series
The Disappointing Recovery of Output after 2009
John G. Fernald
Robert E. Hall
James H. Stock
Mark W. Watson
Abstract

U.S. output has expanded only slowly since the recession trough in 2009, even though the unemployment rate has essentially returned to a precrisis, normal level. We use a growth-accounting decomposition to explore explanations for the output shortfall, giving full treatment to cyclical effects that, given the depth of the recession, should have implied unusually fast growth. We find that the growth shortfall has almost entirely reflected two factors: the slow growth of total factor productivity, and the decline in labor force participation. Both factors reflect powerful adverse forces that are largely unrelated to the financial crisis and recession—and that were in play before the recession.


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John G. Fernald & Robert E. Hall & James H. Stock & Mark W. Watson, The Disappointing Recovery of Output after 2009, Federal Reserve Bank of San Francisco, Working Paper Series 2017-14, 17 Jun 2017.
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DOI: 10.24148/wp2017-14
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