AS OF APRIL 2002 THE signs of economic recovery are sprouting like
spring flowers. The United States has emerged from the short but painful
winter that followed the burst of the asset bubble in early 2000 and the
anxiety caused by the events of September 11 and the anthrax scare in the
fall of 2001.
This report addresses the current state of the economy. What were the
salient characteristics of the 2001 recession? What is the state of the economy
today? How does the latest business cycle compare with earlier
cycles? What are the initial conditions of and therefore the prospects for
the recovery? What are the conditions of profits and equity markets?
Although it is clearly too early to write the definitive economic history of
the recent downturn, it is nonetheless useful to describe the terrain as it
appears in early 2002.