Economy rebounding relatively well - Harvard economists

|By:, SA News Editor

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.