Great Barrington, MA (PRWEB) October 24, 2014 -- The American Institute for Economic Research (AIER) has released a new analysis that explains how economic recessions and recoveries have changed since the 1990s, finding that while recessions have become less frequent, they are caused by structural changes in the economy and lead to longer periods of high unemployment and “jobless recoveries.”
The AIER study includes guidance for individuals and businesses on how to prepare for the permanent change that will come with the next recession.
“This research shows that we are living in a new era of business cycles,” said Stephen Adams, President of AIER. “Recessions are increasingly tied to major shifts in the structure of industries and jobs, and people need to be prepared for those shifts.”
AIER’s analysis, authored by Senior Research Fellow Polina Vlasenko, examined the cause and effects of economic downturns since 1948. It found that a combination of productivity, the rise of the service sector, and government policy have reduced the frequency of recessions, but has deepened their severity. The AIER research shows that the last three recessions – 1990, 2001, and 2007 – followed unusually long expansions, averaging almost eight years, but that employment took much longer to recover. It also showed that recessions now feature more permanent layoffs than in the past.
The AIER study notes that these changes are permanent and people and businesses can make themselves more resilient in advance of the next recession. “Individuals can make sure they have adequate savings to manage longer downturns, and build transferable job skills to compete in the future marketplace,” Adams added. “Businesses can be more resilient by adopting known management best practices, take a more active role in re-training their workers, and by engaging their customers in product innovation.”
More information and complimentary electronic copies of the complete analysis and a summary of the research are available on AIER’s website at https://www.aier.org/Changing-Nature-Recessions-Media. Print copies of the study are available at no cost by emailing info(at)aier(dot)org.
About the American Institute for Economic Research
The American Institute for Economic Research (AIER) conducts independent, scientific, research to help people understand how the economy works and how to advance their economic interests and those of the nation. The Institute, founded in 1933, represents no fund, concentration of wealth, or other special interests. Financial support for the Institute is provided primarily by the small annual fees from several thousand sustaining members, by receipts from sales of its publications, by tax-deductible contributions, and by the earnings of its wholly owned investment advisory organization, American Investment Services, Inc. To learn more, visit http://www.aier.org.
Alex Stockham, Rubenstein Associates, +1 (646) 251-3736, [email protected]