Great Recession is Costing $175 Per Person/Month

New FRBSF paper:

Gauging the Impact of the Great Recession

The Great Recession of 2007-2009, coming on the heels of a spending binge fueled by a housing bubble, so far has resulted in over $7,300 in foregone consumption per person, or about $175 per person per month. The recession has had many costs, including negative impacts on labor and housing markets, and lost government tax revenues. The extensive harm of this episode raises the question of whether policymakers could have done more to avoid the crisis.

via FRBSF Economic Letter: Gauging the Impact of the Great Recession (2011-21, 7/11/2011).


  1. That's all. Thought it would be more, thank goodness.
    Paul Azous CEO

  2. Not impressed by that research letter. "This Economic Letter estimates the amount of consumption lost from the Great Recession by comparing the actual trajectory of real personal consumption expenditures to its pre-recession trend." The "pre-recession trend" turns out to be 2000-07, which is when the credit binge occurred. That is, the US funded unrealistic and unsustainable levels of consumption with an unsustainable amount of cheap credit — and they're using that unrealistic perod as their baseline. That's bogus. Maybe we have overshot to the downside from 08 on, but I don't think anyone could say that the 2000-07 period reflected a sustainable baseline of consumption that should be anyone's reference point.

  3. The letter clearly makes the point that the pre-recession trend was not sustainable and probably not desirable. It does pay to actually read things before bashing them.