The Numbers Game with Russ Roberts

According the National Bureau of Economic Research, the US economy recovered from the recession at the beginning of the summer of 2009. Yet the recovery has been disappointing when compared to other recoveries. In this episode of the Numbers Game, John Taylor of Stanford University talks with host Russ Roberts about the nature of the recovery. How does it compare historically to other recoveries? How can we measure the pace of the recovery? The conversation ends with a discussion of possible explanations for why the recovery has been disappointing.

1) What is potential GDP? (0:52)
2) The economy never catches back up to trend (2:38)
3) The 1981 recession (3:16)
4) Is there a correct or potential level of GDP? (4:45)
5) A look at past recoveries (6:13)
6) Friedman and the Plucking Model (8:10)
7) A look at real growth rates in recoveries (8:59)
8) Employment and the recovery (10:20)


1. 2008-09 and 1981-1982 Recession & Recovery Charts:
Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from –
Potential GDP (GDPPOT) downloaded from FRED 7/13/12, taken from –

2. 1907-08 and 1893-94 Recession & Recovery Charts:
GDP data from NBER, compiled by Nathan Balke and Robert Gordon with adjustments by John Taylor for comparability with earlier charts – Potential GDP calculations by John Taylor using a Hodrick-Prescott trend.

3. The Plucking Model Working Paper:
The “Plucking Model” of Business Fluctuations Revisited by Milton Friedman Working Papers in Economics, E-88-48 — Hoover Institution, Stanford University

4. Growth Rate of Real GDP Chart:
Growth Rate calculated from Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from –

5. Change in the Percentage of the Population that is Working Chart:
Employment-Population Ratio (EMRATIO) downloaded from FRED 7/13/12, taken from –

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