- A mainstream view is that the recovery of the economy after the financial crisis has been fairly sluggish.
- Not so, say Harvard economists Carmen Reinhart and Kenneth Rogoff, who argue that the economy is doing quite well compared with what could be expected.
- Instead of comparing today's U.S. economy to domestic post-war recoveries - as other economists do - Reinhart and Rogoff look at 100 "systemic" crises that have taken place in the last 200 years in the U.S. and abroad.
- But even by just focusing on the U.S., today's economy looks ok: in nine major financial crises, the average drop in GDP per capita was 9% and the recovery period to the pre-crisis peak was 6.7 years. With the American subprime crisis, per-capita GDP dropped "just" 5% and the rebound took six years.