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Reserve Bank governor Glenn Stevens seems to think we should expect lower long-term growth. But what do the figures say?
No recession since 1974–75 has done less damage to the Australian economy in the short term. Yet, amazingly, the recession of 2008–09 has knocked the economy off its long-term track more damagingly than any other downturn for more than half a century.
And now Reserve Bank governor Glenn Stevens is pondering aloud whether this marks a permanent downward step in Australia’s potential growth rate. His thoughts are more than a little confusing, though, as the variety of media interpretations attests.
It might be best if we start by looking at what has actually happened…