TY  - JOUR
AU  - Nordhaus,William D.
TI  - The Mildest Recession: Output, Profits, and Stock Prices as the U.S. Emerges from the 2001 Recession
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8938
PY  - 2002
Y2  - May 2002
UR  - http://www.nber.org/papers/w8938
L1  - http://www.nber.org/papers/w8938.pdf
N1  - Author contact info:
William D. Nordhaus
Yale University, Department of Economics
28 Hillhouse Avenue
Box 208264
New Haven, CT  06520-8264
Tel: 203/432-3598
Fax: 203/432-5779
E-Mail: william.nordhaus@yale.edu
AB  - This paper examines the state of the United States economy as it emerges from the 2001 recession. A comparison of several central economic variables indicates that the 2001 recession was the mildest recession in the postwar period. In light of highly differentiated characteristics of recessions, the paper suggests that we differentiate among downturns by a five-category 'recession severity scale,' analogous to the Saffir-Simpson Hurricane Scale. According to this approach, the 2001 recession fits in the least severe box, a 'category I recession,' along with the 1963 and 1967 non-recessions. The paper next examines the behavior of profits in recent years and shows that financial finagling has infected the aggregate profits numbers. Finally, the study constructs a measure of the forward-looking return on equities and concludes that the prospective real yield on equities in early 2002 is at its low point of the last half-century.
ER  -