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A Postmortem of the 1974 Recession


THE DECLINE of 2.1 percent in real gross national product from 1973 to 1974was the fourth annual dip since the mid-forties (the others occurredin 1954, 1958, and 1970) and by far the largest. With the benefit of hindsight, I shall, in this brief paper, discuss what happened to the economy and to the economic forecasters in that bleak year. In the comments addressed to forecasting, I shall not allocate blame or praise; my purpose rather is to raise some questions and infer some lessons that may be relevant for future research and application.

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