The output gap in two graphs
Neil Irwin (with graphics help from Alicia Parlapiano) has a series of interactive graphs explaining both what's wrong with the economy and how long it will take to fit itself at different rates of growth. I've copied one of the first atop this post, and this comes from Neil's introduction:
Compared with a healthy economy, about 7 million working-age people and 5 percent of the nation’s industrial capacity are sitting idle, not producing what they could. The economy is growing again, but at a rate — less than 2 percent in recent months — that’s too slow to keep up with a population that keeps increasing and workers who keep getting more efficient.
This is the output gap, the divide between the amount the United States can produce and what it is actually producing. The gap, currently $900 billion, explains why we feel so miserable more than a year into what is technically classified as an economic recovery.
Here's the takeaway graph:
I spent the morning listening to Martin Feldstein, Paul Krugman and Jan Hatzius offer their economic forecasts. None of them projected 6 percent growth anytime soon. None of them projected a return to 5 percent unemployment anytime soon.
Posted by: Brighton21 | October 5, 2010 2:35 PM | Report abuse
Posted by: JonathanTE | October 5, 2010 2:37 PM | Report abuse
Posted by: B405 | October 5, 2010 4:10 PM | Report abuse
Posted by: wgartist | October 5, 2010 4:51 PM | Report abuse
Posted by: klhoughton | October 5, 2010 5:25 PM | Report abuse