- There is not downward pressure on wages.
- This recession is fundamentally different than previous ones.
- This recession is the opposite of a real business cycle.
- "Flight to quality" is a symptom, not a cause of this recession.
- This recession comes from a reduced willingness to work, or a labor market distortion, rather than a reduction in demand.
- Labor demand shifts explain no more than 10 percent of what has happened in this recession.
- A fiscal stimulus will be even less potent now than it would have been in previous recessions.
No methodology can be stronger than the data to which it is applied. I am watching the Q4 productivity number closely. I (and, implicitly, the GDP forecasters) do not anticipate a huge productivity decline. But if productivity did decline at a 10 percent annual rate Q3-Q4 or a 5 percent annual rate Q3-Q1 (that's a LOT), then this recession would look more like the previous ones, although even in that case the productivity decline would have come surprisingly late.