The Disappointing Recovery of Output after 2009


Robert E. Hall

James H. Stock

Mark W. Watson

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2017-14 | June 1, 2017

U.S. output has expanded only slowly since the recession trough in 2009, even though the unemployment rate has essentially returned to a precrisis, normal level. We use a growth-accounting decomposition to explore explanations for the output shortfall, giving full treatment to cyclical effects that, given the depth of the recession, should have implied unusually fast growth. We find that the growth shortfall has almost entirely reflected two factors: the slow growth of total factor productivity, and the decline in labor force participation. Both factors reflect powerful adverse forces that are largely unrelated to the financial crisis and recession—and that were in play before the recession.

Article Citation

Stock, James H., John G. Fernald, Mark W. Watson, and Robert E. Hall. 2017. “The Disappointing Recovery of Output after 2009,” Federal Reserve Bank of San Francisco Working Paper 2017-14. Available at

About the Author
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John G. Fernald is a senior research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco, and a professor of economics at INSEAD. Learn more about John G. Fernald