Final answer:
The paper in question discusses how economies experience extended recovery periods following recessions, and how they don't immediately return to long run growth.
Step-by-step explanation:
The paper, which discusses that the economy does not return to its long run growth immediately after recessions, highlights the impact of recent economic downturns since the early 1990s. It emphasizes that recovery periods have become significantly longer compared to previous recessions.
Even after the end of a recession, when positive economic growth returns, it can take a considerable amount of time for private-sector firms to regain confidence in the economy's health and start expanding their workforces again.
For instance, after the end of the Great Recession, it took several years for the economy to near its pre-recession productivity and growth levels. Despite annual productivity increases and governmental efforts to stabilize the economy, indicators such as unemployment rates and real GDP growth remained below optimal levels, which sparked ongoing debates about the effectiveness of those policies.
This has led to discussions contrasting the neoclassical perspective on economics to the Keynesian perspective, particularly in the context of the Great Recession and the more recent pandemic-induced recession. The former generally emphasizes the economy's ability to naturally restore itself in the long run, while the latter argues for proactive fiscal and monetary policies to mitigate the effects of economic downturns and spur growth.
This has been observed notably since the early 1990s, with considerable debate regarding the effectiveness of stabilization policies. The paper contrasts neoclassical and Keynesian economic perspectives using the Great Recession and the pandemic-induced recession as examples.