Friday, November 8, 2013

A sea of recession graphics

Thanks to Paul Krugman's column today, here's a link to a paper by three economists at the Fed presented at an annual IMF conference with unbelievable graphics showing the hit to potential GDP and employment caused by the great recession and its aftermath. The output gap in Figure 1.2 at the end is estimated to be about 4% (± 2% in the 95% confidence interval) currently.