In an Economix post today, titled "The Panic of '08: Recession Cause or Effect?" Professor Mulligan writes:

...recent research questions the claim that the financial panics themselves contributed to their contemporaneous and severe employment downturns.

The post continues:

The timing was different in this recession -- the largest employment drops seemed to come immediately after the financial panic -- but a recent paper by Ravi Jagannathan, Mudit Kapoor and Ernst Schaumburg of Northwestern argues that the coincidence is just as misleading. They argue that the changing global economy -- with more employment of residents in developing countries like China -- created a glut of savings in those countries, and was destined to reduce employment in developed countries regardless of whether there had been a financial panic.

This paper was discussed earlier on this weblog, and Professor Jagannathan provided some clearly exposited counterarguments to my criticisms in his comments. Indeed, I

...

The Labor Department reported today that initial claims for unemployment insurance rose by 27,000 in the most recent available week. Although that's a disappointing development, it's still a small enough increase to allow the 4-week average to fall for the second week in a row. Since that declining 4-week average is one of the few encouraging pieces of news in an otherwise discouraging economic landscape, I wanted to take a closer look at just how significant a statistical signal it really sends.

The interest in the 4-week average of new claims for unemployment compensation results from the observation by Northwestern Professor Robert Gordon that, for each of the last six recessions, once the new claims number began declining from its peak value, the NBER subsequently dated the recovery from that recession as beginning within 8 weeks.

Black line: 4-week average of seasonally adjusted weekly initial ...