Economists love the word “Great” for significant economic events—such as The Great Depression—probably using it too much. I’m as guilty as anyone. I used the terms Great Inflation and Great Disinflation for the late 1960s and 1970s inflation and its end, and Great Deviation for the harmful deviation from good economic policy in recent years. Researchers at the BIS, detecting similar developments in other countries are going global and calling it the Global Great Deviation.
For variety, back in the 1990s, I used the term The Long Boom to refer to the long period of nearly uninterrupted economic growth that began in the early 1980s. But, true to tradition, it didn’t stick. Instead, The Great Moderation caught on. Unfortunately the Great Moderation was killed by The Great Deviation which then gave birth to The Great Recession.
Now, keeping with tradition, Merle Hazard has named his new song about the Fed’s current problem of undoing its unconventional monetary policy The Great Unwind. (It’s a great song by the way). I’ve been arguing for several years that uncertainty about this Great Unwind has been in part the cause of the very slow recovery. Now already in its fifth year, there is plenty of evidence that this recovery has been unusually slow compared to recoveries from previous deep recessions in US history.
But what to call this very slow recovery? Some call it The Not-So-Great Recovery, but will that stick? Bob Hall calls it The Long Slump, which would be an especially good term if the Long Boom had been the preferred term for the Great Moderation. How about the Great Slump? Following the book by Lee Ohanian, Ian Wright and me, it could be the Great Delayed Recovery, or simply, the Great Delay. Time will tell.