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The Second Longest Recovery

Constantin Gurdgiev profile picture
Constantin Gurdgiev

One chart never ceased to amaze me - the one that shows just how unimpressive the current "second longest in modern history" recovery (and only 9 months shy of it being the "first longest") has been, and just how sticky the adverse shocks/impacts can be in modern crises that can be best described by the VUCA (volatility, uncertainty, complexity, and ambiguity) environment:

The fact that the current recovery cycle has been weak is only one part of the story, however, that would be less worrying if not for the second part. Namely, that almost every successive recovery cycle in the past three decades has been weaker than the previous one.

Here is a handy summary of the recovery cycles in the last four recessions based on annual data, for real GDP and real GDP PPP-adjusted:

This article was written by

Constantin Gurdgiev profile picture
I lecture in Finance in Trinity College, Dublin and at Monterey Institute for International Studies (California) and hold a number of non-Executive and advisory positions. I am research-active in macroeconomics and finance, as well as economic policy analysis and my academic record can be found on the designated section of my blog http://trueeconomics.blogspot.com/. In the past, I served as the Head of Research and Partner with St Columbanus AG, Head of Macroeconomics (Institute for Business Value, IBM), Director of Research (NCB Stockbrokers), Group Editor and Director (Business and Finance Publications). All opinions expressed are my own and do not reflect the views or positions of any of my past, present or future employers. Potential conflicts of interest are highlighted in the posts wherever I can reasonably foresee such arising.

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Comments (3)

jprizzuto profile picture
law of larger and larger numbers. really not that 'amazing' nor 'unimpressive'.

anyway, what the u.s. economy needs now and indeed the global economy is the escalating fear of a trade war to end UNFAIR trade practices because the next stage of this 'amazing' yet 'unimpressive' global synchronous economic expansion will be built on the foundation of FAIR, open and balanced international trade for all countries. yay!
fishfryer profile picture
"Namely, that almost every successive recovery cycle in the past three decades has been weaker than the previous one."

If you look at the Federal Funds rate since 1980, you can see that the peaks and valleys have also gotten lower and lower. Recently we were bound at near ZIRP for years and it seems like the next recession will occur at a lower FFR than before and the lowest yet.


This is the warning or the profecy of the Twin Deficit theory... rates fall until they begin rising. Running a fiscal deficit and a current account deficit is an unsustainable path.

This is the impetus for the 'trade war'. Something has got to change.

Personally We are very close to the Keynesian Endpoint.
It looks like the next recession will be "the big one"
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