Bernanke the Unready by Ryan Avent

BEN BERNANKE is on Capitol Hill today, providing his semi-annual commentary on the state of monetary policy. The backdrop for this testimony is as dark as it's been in some time. We would expect the American economy to manage trend growth in nominal output of about 5%, corresponding to about 3% real annual GDP growth and 2% annual inflation, give or take. In the 11 quarters since the end of the recession, NGDP growth has come in at more than a 5% annual rate only twice. In 6 quarters, by contrast, it's been below 4%. Keep in mind that the American economy fell dramatically below trend NGDP growth during the recession, and we would expect consistent above-trend growth during the recovery to make up some of the lost ground.