On the inadequacy of “Great Recession”

by Eric on January 19, 2016

I dislike the term “Great Recession” to describe our times, for technical and political reasons alike. Technically, the severe recession ended in June 2009. But, as the NBER says there,

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity.

And indeed it still hasn’t, six and a half years after the recession ended. In fact, as Kevin O’Rourke noted, in August of 2015

the inevitable happened: measured in terms of industrial output, our current recovery was overtaken by that of the interwar period. Pretty dismal stuff.

So now, having avoided quite so severe a contraction as the 1930s, we are suffering a less impressive recovery. What do we call this ongoing period?

“Malaise” is taken, and rather ruined, by Carter-related discourse. I’ve lately been suggesting “the great economic unpleasantness” but without, I confess, really expecting it to catch on. Krugman’s old “Lesser Depression” is looking depressingly correct.



Scott Supak (@ssupak) 01.20.16 at 12:28 am

The Little Bush Doldrums follow the Little Bush Depression.


John Quiggin 01.20.16 at 12:42 am

I’m using “Lesser Depression” in my book-in-progress Economics in Two Lessons. So when it’s finished (ROTFL) and becomes a standard text (ROTFLMAO), the correct terminology will come into general use.


Adam Hammond 01.20.16 at 1:05 am

The Great Embuggerance

“Any obstacle (natural or artificial) that gets in the way of progress”


js. 01.20.16 at 1:11 am

The Doldrums of the longue durée?


Ronan(rf) 01.20.16 at 1:15 am

The great regression.


Rakesh Bhandari 01.20.16 at 1:30 am

Somehow this has to be worked in
The Post-Bubble Deflation?

Or in terms of technological stagnation
The Fifth Kondratiev Downswing

Or due to the effects of globalization
The Decline of the West


The Raven 01.20.16 at 2:10 am

I simply call it the current depression. It isn’t even lesser in Europe, just shorter.


john c. halasz 01.20.16 at 2:15 am

Brad DeLong, eminent economic historian, has called this the longest depression ever. Evidently, he’s never heard of the 1873-1896 period.


Eric 01.20.16 at 3:12 am

John, glad to hear you’ll give the term its due. And john c. halasz, I suppose technically there was a recovery in the middle of the long c19 depression, but point taken.


DavidTheK 01.20.16 at 4:32 am

Pink Floyd has the copyright – but really their song fits. This is the cumulative effect of the (great) Turning Away.


nnyhav 01.20.16 at 5:26 am

I proffered (FT Long Room, Sept ’10) and still prefer the Mild Depression.


Paul Montgomery 01.20.16 at 9:30 am

The Great Interregnum, denoting the gradual and painful shift between the US as kings of the world and China as the inevitable heir to the throne.


P O'Neill 01.20.16 at 12:48 pm

Even though it’s too technical, the term from one of the papers at the Davos-dans-les-Rockies event last year (Jackson Hole) has the term Disparate Confounding Dynamics. Because of the challenges of the post-2008 period is not everything has the classic symptoms of recession. If we’re into another one, it’s going to have happened with an oil price crash, for example.


oldster 01.20.16 at 12:54 pm

that time when there was decent productivity growth and the rich people stole it all?


Matt 01.20.16 at 1:03 pm

The dysthymia?


Mark Field 01.20.16 at 3:22 pm

Everyone knows that acceptance follows depression. We’re in the Dismal Acceptance.


In the Provinces 01.20.16 at 3:41 pm

We had the Great War, which became World War I, when World War II broke out. How about the Great Depression I and the Great Depression II, or GD II for short?


Bloix 01.20.16 at 5:18 pm

As for why “The Great Recession” is wrong, Eric and his readers schooled me on the meaning of “recession” six years ago, see https://edgeofthewest.wordpress.com/2009/02/02/the-pony-chokers/
if you’ve got the patience.

I think the name for this period will depend on the year or so. If the economy grows slowly out of it, then the important thing will be “the Crisis of 2008” and the following depression won’t have a name. But if we sink back into recession (in the technical sense!) for any length of time, then it will be “The Long Depression.”


Dario Vadi 01.20.16 at 9:10 pm

I’m somewhat partial to The Notably Rare Occassion


Lee A. Arnold 01.20.16 at 10:46 pm

I showed why it is a “depression” and not a “recession”, starting at time 2:40 of this animation, from 2013:


Frank Wilhoit 01.21.16 at 12:05 am

The word you are looking for is “sabotage”.


Alex 01.21.16 at 11:21 am



Tony Wikrent 01.21.16 at 3:02 pm

I call it the Second Great Depression. Most people don’t see it yet, but I think when we eventually get serious about investing the nearly $400 trillion needed to solve the problem of climate change, it will be crystal clear that this has been a Second Great Depression.

The International Energy Agency estimated in a recent report that the world needs to spend $359 trillion between now and 2050 to avoid catastrophic climate change. World GDP in 2014 was US$78.28 trillion. And the growth rate of world GDP has been around 3.4 percent annually for a number of years. Project the growth of world GDP out to 2050, add it all up, and you get US$ 5,630.5 trillion.

$359 trillion is only 6.4 percent of world GDP over the next 35 years.

And it will probably be less than 6.4 percent, because once we get serious about doing this, world GDP is going to boom! We’re more likely to see growth rates of five or six percent a year. Maybe even double digit growth rates, like China achieved for much of the 1990s and twenty-naughts. We’re going to replace every vehicle powered by an internal combustion engine with an electric vehicle. We’re going to build a whole new distribution, wholesale, and retail system to support electric vehicles. We’re going to build tens of thousands of kilometers of urban rail lines, in every major city on earth. We’re going to build hundreds of thousands of wind power turbines, and two or three billion small, independent solar power systems, all over the world. We’re going to tear down and replace, or remodel and insulate almost every single building and dwelling on the planet.

There is so much work that we must do, there will be massive shortages of labor and skills. There will be plenty of work for everybody, from the people in the funny clean suits in the big chip plants churning out photovoltaics, to the carpenters and plumbers and electricians doing all the replacing and remodeling. With all the new technologies we have in hand, it will be a new golden age of capitalism. We will banish poverty from the planet, and this Second Great Depression will be seen for exactly what it is.

The First Great Depression was largely caused by the stubborn clinging to failed economic doctrines, such as the gold standard, and the limited government doctrines (which were the basis of the Lochner thinking of the Supreme Court which struck down much of FDR’s New Deal programs, as well as Treasury Secretary Mellon’s advice to “purge the rotteness from the system” by letting everything be liquidated).
Similarly, this Second Great Depression is largely caused by the stubborn clinging to failed economic doctrines, such as libertarinism, anti-statism, conservatism, and the confusingly named economic doctrines of neo-liberalism. Once we abandon our worship of the golden calves of free markets and private enterprise, and smash the political and economic power of Wall Street and the City of London, we can get on with building a wonderful new future for ourselves and our children.


Pat 01.21.16 at 5:18 pm

It is or at least should be “the Second Great Depression.” In the UK, the recovery has been even worse than after 1929, and the American experience has been miserable: six million long-term unemployed over what would be expected in a healthy economy, nearly a decade now of zero median wage growth? Labor participation rates have rebounded somewhat, but if you look at just raw jobs (an inconvenient measure, I’ll concede), the American economy is in an eight-year trough from which there has been no recovery. Take a look at the sample graph at BLS, for instance.

It particularly aggravates me when President Obama is faintly praised as inheriting a second Wall Street Crash but having avoided a second depression, even if his economic record isn’t otherwise sterling. He certainly inherited a nearly unprecedented economic situation, but avoid another depression? Sadly, no he didn’t.


Pat 01.21.16 at 5:25 pm

I meant to say what Tony Wikrent said, or at least as well as Tony said it. And also not two hours after.

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