When GDP changes, it’s because aggregate demand falls: Changes in actual and potential GDP as recessions hit
| 1980q1 | 1981q3 | 1990q3 | 2001q1 | 2007q4 | 2019q4 | |
|---|---|---|---|---|---|---|
| Last year before recession | ||||||
| Real GDP | 1.4% | 4.3% | 1.7% | 2.2% | 2.1% | 3.2% |
| Potential GDP | 3.2% | 2.5% | 3.0% | 3.7% | 2.0% | 1.9% |
| Peak-to-trough change (annualized) | ||||||
| Real GDP | -4.3% | -2.0% | -2.7% | 0.7% | -2.6% | -17.5% |
| Potential GDP | 2.3% | 3.0% | 2.5% | 3.0% | 1.7% | 1.8% |
| “Swing” | ||||||
| Real GDP | -5.7% | -6.3% | -4.5% | -1.5% | -4.7% | -20.6% |
| Potential GDP | -0.9% | 0.5% | -0.5% | -0.8% | -0.2% | -0.1% |
Note: Author’s analysis of data sources from Figure B.