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13 posts on "Great Recession"

November 25, 2011

The Failure to Forecast the Great Recession

Simon Potter


Experience shows that what happens is always the thing against
which one has not made provision in advance
.

-- John Maynard Keynes1



Our best plan is to plan for constant change and the potential for instability, and to recognize that the threats will constantly be changing in ways we cannot predict or fully understand.

-- Timothy Geithner2

The economics profession has been appropriately criticized for its failure to forecast the large fall in U.S. house prices and the subsequent propagation first into an unprecedented financial crisis and then into the Great Recession. In this post, I examine the performance of the forecasts produced by the economic research staff of the Federal Reserve Bank of New York (New York Fed) over the period 2007-10 and consider some of the reasons why we, like most private sector forecasters, failed to predict the Great Recession. This spreadsheet contains staff forecasts, the outcomes, and a standard measure of private sector forecasts—the Blue Chip consensus. In addition, staff material prepared for bi-annual meetings of the New York Fed Economic Advisory Panel provide some further insights into the evolution of the staff outlook.

Continue reading "The Failure to Forecast the Great Recession" »

May 09, 2011

The Great Recession and Recovery in the Tri-State Region

Jason Bram and James Orr

In 2008, as the financial crisis unfolded and the U.S. economy tumbled into a sharp recession, the outlook for the tri-state region (New York, New Jersey, and Connecticut) and especially New York City—the heart of the nation's financial industry—looked grim. Regional economists feared an economic downturn as harsh as the one in 2001, or the even deeper recession of the early 1990s. Now, as the recovery takes hold, we can report that although the economic downturn was severe in the region, with the unemployment rate surging above 9 percent in many places, it was less severe than many had anticipated. This post—which is based on the New York Fed’s May 6 Regional Economic Press Briefing—recaps how the Great Recession affected employment across the region, how the ensuing recovery has progressed, and what the prospects are for job growth as we go forward.


Continue reading "The Great Recession and Recovery in the Tri-State Region" »

April 06, 2011

Temporary Layoffs during the Great Recession

Erica L. Groshen

In this post, I show that despite the depth of the Great Recession, U.S. employers did not use temporary layoffs much to cut costs. Just as they did during the previous two recessions, when firms laid workers off, they usually severed ties completely. This prevalence of permanent layoffs during the recession could slow the employment rebound over the coming months. It also raises questions about why the behavior of employers during recessions has changed.

Continue reading "Temporary Layoffs during the Great Recession" »

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