Executive Summary: What would explain the length of the jobless recovery phase in an economic recovery? Would we find answers by comparing trends across recessions, or by comparing trends across countries, or by both? From the desk of I-Think-Therefore-Economics-Exists.
The employment/ population ratio has hit a low point not seen in a long while: http://research.stlouisfed.org/publications/net/page10.pdf
While you can utilize publicly available statistics to make your own charts and form your own views, here is a way to structure thoughts around it:
- How do you compare recoveries and the nature of unemployment across recessions in the same country?
- How do you compare recoveries and the nature of unemployment across countries during the same recession period?
Comparing Economic Recoveries Across Countries During the Same Recession Period.
Since there have been comparisons between the European economies and the American economy:
- How do the trends in the employment/ population ratio compare across countries?
- Are European economies more likely to have structural changes in unemployment rates than the US?
Comparing Economic Recoveries Across Recessions in the Same Country.
What does the increasing "length" of the jobless recovery phase in a recovery mean, as a trend across recessions?
Is there something in the nature of the economy, the nature of the macroeconomic entities in the economy, the depth of the recession, or the boom period prior the recession that has primacy in terms of its impact on the nature of the recovery?
Here is one pattern of Socratic thought that explores the two questions above.
Is the increasing length of jobless recovery phase in a recovery, as a trend across recessions, a function of:
- The increasingly service oriented nature of the economy?
- An increasing dependence on large monolithic corporate entities over time as drivers of economic performance, with the dependence changing from direct hiring to a greater multiplier effect across the economic ecosystem in terms of dampening hiring?
- The nature of work available to labor, which has changed from hyper-local activity, to increasingly being touched by global supply chains?
- An increasing delinking of corporate performance, financial institution performance and "real" economy performance?
- The degree of specialization, and education, require for work, requiring a greater time for individuals to unlearn, turn around and relearn?
- E.g. I talked about Baked by Melissa here, and surprise, surprise, it has expanded to four stores in NYC.
- This may be counter intuitive, if you think in terms of supply, where people band together to create economic activity (not everybody can be an entrepreneur).
- However, if you think in terms of depressed demand, which translates into opportunity for economic activity of a certain type, this may be a worthwhile line of inquiry.
- E.g. This may be an effect seen in decreasing labor activism (ed- analysis to be done) with each passing recession.
- E.g. How long did the Dutch economy take to recover from the tulip boom?
Simply the depth of the recession?
What do you think?
Note: Throw someone a thought provoking point about economics, and ye shall reap many more thoughts in return. These thoughts were first published in a macroeconomics forum, in the week of July 16th, 2011. Thank you, Prof. Rosensweig.