{"id":204,"date":"2010-10-02T17:22:33","date_gmt":"2010-10-02T22:22:33","guid":{"rendered":"http:\/\/www.timrosenblatt.com\/blog\/2010\/10\/02\/the-great-debt-drag\/"},"modified":"2010-10-02T17:24:10","modified_gmt":"2010-10-02T22:24:10","slug":"the-great-debt-drag","status":"publish","type":"post","link":"http:\/\/www.timrosenblatt.com\/blog\/2010\/10\/02\/the-great-debt-drag\/","title":{"rendered":"The great debt drag"},"content":{"rendered":"<blockquote><p>What makes this recovery different is that it follows a recession  brought on by a financial crisis. A growing body of research has found  that such recoveries tend to be slower than those after \u201cnormal\u201d  recessions. Prakash Kannan, an economist at the IMF, examined 83  recessions in 21 rich countries since 1970. In the first two years after  normal recessions growth averaged 3.7%. After the 13 caused by crises,  growth averaged 2.4%. America has been doing slightly better than this  (see chart 1).<br \/>\n<br \/>\nThe Federal Reserve brought on most post-war recessions by raising  interest rates to squeeze out inflation. When the Fed cut rates, demand  revived. Financial crises interfere with the transmission of lower rates  to private borrowers. People can\u2019t or won\u2019t borrow because the value of  their collateral\u2014in particular, houses\u2014has fallen. Banks are less able  to lend because their capital has been depleted by bad loans, or less  willing because customers can\u2019t meet tighter underwriting standards.<\/p><\/blockquote>\n<p><a href=\"http:\/\/www.economist.com\/node\/17041738\">The great debt drag<\/a>, The Economist<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What makes this recovery different is that it follows a recession brought on by a financial crisis. A growing body of research has found that such recoveries tend to be slower than those after \u201cnormal\u201d recessions. Prakash Kannan, an economist at the IMF, examined 83 recessions in 21 rich countries since 1970. In the first &hellip; <a href=\"http:\/\/www.timrosenblatt.com\/blog\/2010\/10\/02\/the-great-debt-drag\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The great debt drag&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/posts\/204"}],"collection":[{"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/comments?post=204"}],"version-history":[{"count":0,"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/posts\/204\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/media?parent=204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/categories?post=204"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.timrosenblatt.com\/blog\/wp-json\/wp\/v2\/tags?post=204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}