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The 18-month-long Great Recession and two-month Covid-19 recession were the two most severe contractions in the US economy since the 1930s. Following the Great Recession, the US economy enjoyed its longest recovery and expansion on record, although at a relatively slow pace. Following the Covid recession, growth in economic activity has been generally robust.

Measured peak to trough, real GDP fell 3.8% over the six-quarter-long Great Recession and it fell 10.1% over the two-quarter-long Covid Recession. Following the Great Recession, it took three full years for real output to surpass its pre-recession peak; following the Covid Recession, recovery took only one and one-half years. Measured from the trough of the Great Recession in Q2 2009, real GDP expanded for 10.5 years, growing 26.7 percent in total, or at any annual rate of 2.3 percent. From the trough of the Covid recession in Q2 2020, real GDP expanded more than 14 percent in the two years for which data are available, at an annual growth rate of 6.8 percent. (Question:  can you verify all of the figures in this paragraph?)

Besides GDP, the two most recent business cycles can be compared to each other along multiple other economic dimensions (such as specific labor market outcomes, production activities, personal income and spending, price levels, etc.). You are asked to write a data-driven paper comparing the Great Recession and its subsequent expansion (in other word, the time period from January 2008 through February 2020, according to the NBER business cycle dating committee) to the Covid-19 recession and its subsequent expansion (that is, the period from March 2020 through at least June 2022, or later if more recent monthly data are available). In your paper you should compare the two business cycles to each other based on five or more specific macro variables of your own choosing. Like the analysis of real GDP in the previous paragraph, your descriptive analysis of how each variable behaved over each business cycle should be mathematically detailed and based upon the underlying economic data which you can extract from FRED. You might also find it helpful to include some graphs in your paper, generated either by FRED or by making use of EXCEL or another graphing program.

After describing the behavior of five or more specific variables over these two business cycles, you want to reach some specific conclusions.  In what ways are the two business cycles like each other?  In what ways might they be different? It may be that you find the two recessions similar, while their subsequent recoveries and expansion periods to be different from each other. Or perhaps, it may be the expansions which look similar, while the recessions themselves differ. Your specific conclusions are likely to depend in part upon the variables you have selected to use for your detailed data analysis.

Finally, it should be noted that this paper is not an assignment which requires you to consult any outside sources. All data analysis and graphs should be your own, based only on the behavior of specific variables you extract from FRED. For each variable selected, you will want to define the variable in some detail and justify your chose of it.  For example, if you were writing about real GDP, you would want to describe to your reader what GDP measures (that is, annual production from an expenditure approach) and would want to justify its selection as representing the broadest and most comprehensive measure of economic activity available. Your final paper, including an introduction, detailed data analysis, and conclusions is likely to be somewhere between 7 and 12 pages long. The first draft of the paper is due Thursday October 13. Your final paper, taking account of comments and suggestions from me, as well as your own additional revisions, is due about one month later.