Economic Growth: Two Possible Paths

While the recession of 2007-2009 has been officially over for roughly two years, the American economy has yet to achieve robust economic growth. By historical standards, this is relatively uncommon. Typically following a recession, the economy rebounds strongly, growing more rapidly than the long-run trend for a few years, and then settles back to its more traditional growth path. As a result, on average, living standards return to, or at least near, the level they would have been had no recession occurred.
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