Before 1990, annual GDP growth during postwar recoveries averaged nearly 4 percent, while it has averaged just above 2 percent in the most recent recovery. This session will assess the role played by different factors in generating a slow recovery, viewed through the lens of a general equilibrium macroeconomic model: To what extent can the widespread tendency of overpredicting GDP growth during the recovery be attributed to factors such as a decline in productivity, a decline in labor force participation, financial headwinds, and/or overly constrained monetary and fiscal policy? What are the headwinds that have mattered most in the slow recovery so far?

Another puzzle associated with this recovery is the significant decline in the unemployment rate despite modest GDP growth. This session will address the extent to which errors in Okun's Law can be explained by a coincident decline in the potential growth rate of the U.S. economy. To what degree have changing demographics, capital accumulation, and technology each contributed to the decline in potential output? Was the decline exacerbated by other features unique to the Great Recession and the recovery that may eventually dissipate going forward? Are there factors at play other than a decline in the economy's potential performance that can help reconcile the evolution of the unemployment rate and GDP growth?

The Great Recession was accompanied by a noticeable decline in labor force participation, even among the prime working-age population. How much of this decline can be expected to reverse? Is a further tightening of the labor market a precondition for a much stronger rebound in participation? Is the lack of participation the consequence of a rise in the reservation wage or a fall in the market wage? Does it reflect a mismatch of skills? Would retraining programs be an effective tool to bring more people back into the labor force?