“The title of a new paper from three economists at the Federal Reserve is bloodless:“Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”

“But its conclusions are chilling.

“The paper offers a depressing portrait of where the economy stands nearly six years after the onset of recession, and amounts to a damning indictment of U.S. policymakers. Their upshot: The United States’s long-term economic potential has been diminished by the fact that policymakers have not done more to put people back to work quickly. Our national economic potential is now a whopping 7 percent below where it was heading at the pre-2007 trajectory, the authors find.”

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