Recessions and Inflation in US-1

Recessions and Inflation in US-1 - Recessions and Inflation...

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1 Recessions and Inflation in U.S. Over Last 40 Years
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2 Some Perspective: Major Historical Recessions
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3 Economic Recoveries The question at hand: When will we return to “normal growth?” Note: Out of a recession does not mean normal growth “V” shape recoveries (rapid growth out of a recession) “U” shape recoveries (sluggish growth before recovery) “W” shape recoveries (slip back into another recession) “Reverse J” shape recoveries (sluggish growth to lower
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4 Symptom of a Recovery (Part 1)
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5 Symptom of a Recovery (Part 2) Real Gross Domestic Product: Quarterly, 1970Q1 – 2009Q3 Note: The black line is the level of real GDP (left axis) Note: The red line is quarter over quarter growth rates of real GDP (right axis)
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6 Symptom of Recession (Part 3) U.S. Consumption Expenditures: Quarterly, 1970Q1 – 2009Q3
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7 Symptom of Recession (Part 4) Consumer Sentiment: Monthly, 1978M1 – 2009M10
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8 Real GDP and Inflation Over the Last Three Decades? High or Rising Inflation: 73-75 07-08 79-80 Low or Falling Inflation: 81-83 96-00 (sustained) 08-09 90-91 01-02 High Growth in GDP: 83-86 96-00 (sustained) Negative Growth in GDP: 74-75 90-91 79-80 01-02 81-83 08-09 1) Sometimes Negative Growth in GDP and Rising Inflation (70s) 2) Sometimes Negative Growth in GDP and Falling Inflation (80s and 90s) Need Theory to Explain Both Sets of Facts!!!!
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9 What is a Recession? “Official Rule of Thumb” - 2 or more quarters of
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This note was uploaded on 01/17/2012 for the course ECON 002 taught by Professor Eudey during the Fall '08 term at UPenn.

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Recessions and Inflation in US-1 - Recessions and Inflation...

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