January 4, 2013 / 7:19 PM / 5 years ago

Fed's Plosser: U.S. potential growth rate has likely been lowered

SAN DIEGO (Reuters) - Philadelphia Federal Reserve President Charles Plosser said on Friday that the United States had likely suffered a lasting decline in the trend potential growth rate of its economy as a result of the severe 2007-2009 U.S. recession.

“It certainly looks like we’ve had a permanent shock,” he told a panel discussion on the real business cycle during the annual meeting of the American Economics Association. However, he said that it would take a considerable period of time before the data would be able to verify that trend growth had declined.

Reporting By Alister Bull; Editing by Chizu Nomiyama

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