If you had the misfortune to sit through George Osborne’s Autumn Statement yesterday, you might have thought we were well on the way to recovery. Sure, things are hard for now, but the road back to good times has been cleared.
What the Chancellor didn’t dwell on is just how far along that road we will now have to travel. A recent blog post by Catherine Matthieu at the French Economic Observatory makes this distance painfully clear. The graph below shows how the economy fared after each major post-war recession. For each of 1973, 1979, and 1990, a complete recovery – back to pre-recession levels of output - had occurred after no more than three years or so.
For this recession, the picture is a little different. This isn’t a recession: it’s a slump.Click here for full blog