Using European Commission real-time data, we show that potential output (PO) estimates were substantially and persistently revised downwards after the Great Recession. We decompose PO revisions into revisions of the capital stock, trend labor, and trend total-factor productivity (TFP)....

Using European Commission real-time data, we show that potential output (PO) estimates were substantially and persistently revised downwards after the Great Recession. We decompose PO revisions into revisions of the capital stock, trend labor, and trend total-factor productivity (TFP)....

Ever since the end of the Great Recession, the U.S. economy has experienced a period of mild inflation, which contradicts with the output-inflation relationship depicted by a traditional Phillips curve. This paper examines how the permanent output loss during the Great Recession has affected...