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Top Economists Rethink Post-Crisis Policy

Wall Street Journal (11/13/13) David Wessel

The International Monetary Fund recently gathered some leading economists to consider the economic policy lessons learned over the past five years. The U.S. is learning how to prevent contagious financial crises and how to manage very slow growth. Former U.S. Treasury Secretary Lawrence Summers says the chance of another economic crisis is much less significant than the “continuing crisis” of “more kids living at home because they can’t get jobs after they graduate from school than there have been in decades.”

According to leading U.S. Federal Reserve economists, the financial crisis and its fallout did so much damage that even at full strength the U.S. economy is capable of producing 7% less now than it would have been capable if the crisis had never happened, resulting in a loss of $1 trillion in goods and services each year.