Here is quarterly GDP, (Update: seasonally adjusted at annual rates) on a log scale, since 1947 - basically, my entire lifetime, minus the first 3 1/2 weeks. I've divided it into two segments at 1980, and added trend lines for each segment. Note the slope differences.
Note also that pre-1980 the data line snakes quite a bit around the trendline, while post-1980 it mostly lies on the line, except at the extremes. There is your alleged "Great Moderation."
Graphs like this one are popular now. Mark Thoma is cautiously encouraged by the uptick since the '08 collapse. Noah Smith is underwhelmed. I think Noah is a wild-eyed optimist. His post is very good, though. Please go read it.
Bill McBride looks at it in a completely different way. Please check it out.
Thoma curbs his enthusiasm:
Again, though we are beginning to grow at trend rate again and that's better than the free fall we were in, there is a lot of ground to make up. That requires a period of growth in excess of trend, and there's nothing to indicate that will happen anytime soon. [And it will be even slower if we begin cutting the deficit too soon.]
I only thing I disagree with is: ". . . we are beginning to grow at trend rate again . . . ." No, We're not. Here is GDP during the current millennium.
I've indicated GDP during the recovery in yellow, and added a new trend line for that portion. Also visible are the pre-1980 trend line in green, and the post-1980 trend line in red. By some weird coincidence, the three almost converge in early 2000, which is helpful in observing the slope differences for the periods in question.
Even if we avoid a slip back into recession - and I am deeply pessimistic on this issue - we seem to have established a new trend line which is lower than the old trend line, which is lower than the even older trend line. So our chances of ever getting back to even the post-1980 trend line are slim, indeed. Fun stuff, eh?
Just for kicks, here is the same chart, color coded by the reigning president's political party.
Make of it what you will.
In Part 2, we'll look at rate of change.
Data source is the Bureau of Economic Analysis (BEA.)