Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (16583)	3/8/2002 8:25:44 AM
From: Ilaine	Read Replies (1) of 74559

>>Productivity increased during the depression too... so what??<< If you don't mind a lecture, the Great Depression bottomed in early 1933, and the economy started marching up at a rapid clip. It was a very sharp v-bottom. The problem was that the decline was very steep, so there was a long way to go. And of course different industries had different recoveries. In fact, it's usual for productivity to increase during recessions and depressions, as industries innovate to produce more at a lower cost. But of course, as Don has pointed out repeatedly, an increase in productivity doesn't necessarily mean an increase in GDP. If a technological advance makes an industry easier to enter, then there is more competition which usually means lower prices, maybe lower profitability. Good for the consumer, maybe not that great for the producers. Although being more efficient usually translates into surviving, which is good.

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