It may come as no surprise to Georgia, where the recovery didn’t look much better than the recession, but the Federal Reserve says that economic wounds leave scars.
It has been assumed that economies bounce back once the downturn is over, but a study shows that the tough times are not temporary, said a paper released this week by economists at the Fed.
Fed authors reached their conclusions after looking at 49 national economies, 149 recessions and the periods afterward.
They looked at pre-recession trends and post-recession trends and found that “recessions tend to depress the long-run level of output,” which leads them to think that “demand shocks have permanent effects.”
No news perhaps in Georgia where there are roughly 224,000 fewer people employed than when the economy was hitting the skids in late 2007. Metro Atlanta is likewise still not back to pre-recession levels: employment is 77,000 shy of that peak.
The Fed paper is titled: “Potential Output and Recessions: Are We Fooling Ourselves?”
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