A “picturesque” post. Illustrates 3 recessions during the “Great Moderation”, including the one that decreed it´s death by ignoring the “Monetary Equilibrium” principal (in which money growth offsets velocity changes) that “saved” the others from such fate. And also a “Great Recession” from 120 years ago.
They give out the same “message”: While the economy is “down under”, employment will continue to be “missed”. It´s not just about growing, spending has to grow by enough to “fill the hole”.
Update: The Cleveland Fed came out yesterday with a detailed analysis: High Unemployment after the Recession: Mostly Cyclical, but Adjusting Slowly
Update: Scott Sumner argues from a different perspective that the problem is demand, not structural
Update: Bill Woolsey has a post:
David Laider has another interesting paper. Even discussed Robertson and Hayek on forced saving. What was missing? What would happen if money expenditures grows at a slow steady rate?