RETURN TO THE NOT-SO-GREAT RECOVERY? (Originally from 2015)

(I believe that except for the 2018 ADDITION in parentheses, the blog entry below is from March 3, 2015.)

The U.S. economy may not have grown quite as much as initially estimated in the fourth quarter of 2014, according to the latest estimate for U.S. real GDP growth announced by CNBC and others late last week.   Whether one looks at either the initial estimate or the revised estimate of U.S. real GDP growth for the fourth quarter of 2014, I believe either estimate underscores the possibility, if not the likelihood, that the U.S. economy has returned to a lackluster recovery after two quarters of more rapid growth. I refer to the recovery from the Great Recession in the U.S. as the Not-So-Great Recovery in my forthcoming book to be published soon. (More on that in later (and earlier) blog entries.)  (ADDITION:  Also note that others have used the term 'Not-So-Great Recovery,' and that the book described as forthcoming has been published.)

The plummeting velocity of money contributed to the severity of the Great Recession. Moreover, the fact that the velocity of money in the U.S. continued to fall in most quarters during the recovery and was apparently still declining in the fourth quarter of 2014 indicates that, in my view, insufficient velocity of money was holding the economic recovery back, assuming that greater velocity would not increase the price level only. Data from www.economagic.com (also available elsewhere) show that the U.S. economy has many more dollars in the M1 money supply now than it did in the fourth quarter of 2007. In my opinion (and perhaps in the view of others), it is time to get the dollars trading again more frequently. Can anybody say ‘fiscal policy?’