A Little Recession Perspective

Hat tip from Greg Mankiw for the pointer to Donald Marron’s post on keeping the current economic downturn in perspective.

Marron states:

The economy would have to fall much, much further than economic forecasters expect for the losses to come anywhere near those experienced in the Great Depression.

And then we get to see this graph, which is a fantastic way of trying to put things in perspective.


I try to keep this graph in my head whenever people talk about “the worst economy since the Great Depression” and especially when they talk about how crisis requires the government to spend enormous amounts of money.

The difference between this economy and the economy of the Great Depression is nearly the difference between a day trip from New York City to Washington DC and a cross country trip from New York City to LA.


  1. Woody says:

    Good perspective! I haven’t seen this anywhere else.

  2. Josh P says:

    Your graph needs some data clarification. Each of the five downturns is a one or two year period–I’m not clear if by, say, 1953-4 you mean a period overlapping 1953 and 1954, e.g. a fiscal year, or Jan. 1, 1953 – Dec. 31, 1954–but the Great Depression figure is a three or four year period.

    You could clear this up by annualizing the figures.

    Maybe the figures are annual rates but not labeled as such?

    I recently found your site and I love it. You do a great job clarifying data, so I thought you might want to clarify this.

    Nice video with the pennies on the table. Visualizations speak in ways written numbers can’t, e.g. this one

  3. Wendy T says:

    Congrats on getting in front of Congress at GOP expense. Sounds like lots of fun with math! What we see in the recession graph is that this recession has already surpassed the Carter recession and seems to be moving south. For some of us this is a depression (lost job, losing assets) and becoming a ward of the state looks like a cheap easy alternative to working to make ends meet.

  4. BCC says:

    For an alternative perspective, discuss: http://www.voxeu.org/index.php?q=node/3421

    Once we’re safely off the bottom, I’ll feel better about the above graph.