Federal Reserve Chairman Ben Bernanke last week became the latest
economist to ask why the current economic recovery has been so weak. The
question has inspired a cottage industry of studies, papers and
speeches with often-esoteric and murky theories. The explanation is
actually straightforward: The financial crisis and Great Recession
scared the wits out of most Americans -- not just consumers but also
corporate managers, bankers and small-business owners. They are reacting
accordingly. They're cautious, risk-averse and defensive. They're
spending less and saving more.
The recovery's languor is striking. Bernanke, speaking to the New York Economic Club, noted that the economy's annual growth rate had averaged only about 2 percent since the recession officially ended in mid-2009. By contrast, the average growth rate of post-World War II recoveries at a similar stage is almost 4.5 percent. This means the economy is producing about $1.4 trillion less of everything, from Big Macs to cars, than it would if we'd had an average recovery.
Read more: http://www.realclearpolitics.com/articles/2012/11/26/why_the_recovery_is_feeble_116239.html
The recovery's languor is striking. Bernanke, speaking to the New York Economic Club, noted that the economy's annual growth rate had averaged only about 2 percent since the recession officially ended in mid-2009. By contrast, the average growth rate of post-World War II recoveries at a similar stage is almost 4.5 percent. This means the economy is producing about $1.4 trillion less of everything, from Big Macs to cars, than it would if we'd had an average recovery.
Read more: http://www.realclearpolitics.com/articles/2012/11/26/why_the_recovery_is_feeble_116239.html
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