TY  - JOUR
AU  - Fernald, John
TI  - Productivity and Potential Output Before, During, and After the Great Recession
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 20248
PY  - 2014
Y2  - June 2014
DO  - 10.3386/w20248
UR  - http://www.nber.org/papers/w20248
L1  - http://www.nber.org/papers/w20248.pdf
N1  - Author contact info:
John Fernald
Federal Reserve Bank of San Francisco 
Economic Research Department 
Mailstop 1130 
101 Market Street, 11th floor 
San Francisco, CA 94105
Tel: 415-974-2135 
Fax: 815-642-0515
E-Mail: fernaldjg@gmail.com
M1  - published as John G. Fernald. "Productivity and Potential Output before, during, and after the Great Recession," in Jonathan A. Parker and Michael Woodford, editors, "NBER Macroeconomics Annual 2014, Volume 29" University of Chicago Press (2015)

M3  - presented at "29th Annual Conference on Macroeconomics", April 11-12, 2014
AB  - U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules out explanations that focus on disruptions during or since the recession, and industry and state data rule out "bubble economy" stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about ¾ of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.
ER  -