Since Minneapolis Fed and others are posting various comparisons of employment and output during recessions (and pseudo-recessions — see the discussion at Spencer at Angry Bear), I thought I’d post an analogous picture of industrial production.

Figure 1: Log industrial production (Dec 2008 vintage), normalized to 0 at peak. Current recession (blue), 1981 recession (black). Source: FRB via FRED II (accessed 1/16/09), and NBER.

Spencer beat me to the punch, and has additional details, but I think a comparison against all the individual actual post-War recession trajectories for IP is useful, keeping in mind industrial production is a smaller proportion of GDP over time. (Of course, one probably wants to think of “severity” in the context of the “Great Moderation”, in which case, this decline looks pretty remarkable.)

Last 5 posts by Menzie Chinn

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