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Supply-side Costs of the Great Recession
The long drawn-out recovery from the 2008-09 financial crisis is now perceived as largely complete. The unemployment rate, currently at 5.6 percent, is well below the average of the last half-century and is projected to decline below the 5½ percent level that the Congressional Budget Office (CBO) has long characterized as full employment by the end of the year. Capacity utilization of the industrial sector is also close to its pre-crisis average of 80 percent. However, the improvements in these standard measures of resource utilization are largely the product of reduced supplies of labor and capital rather than increased demand…Read More