FRANKFURT: The eurozone is hurtling back into recession, economists declared this week after official figures portrayed a shrinking economy.
But by some measures, the downturn has been under way for years.
With the exception of Germany, none of Europe's biggest economies have returned to the level of economic output they had at the beginning of 2008, before the subprime mortgage crisis in the United States spread across the Atlantic, according to calculations by two US economists, Peter Rupert and Thomas F Cooley.
In contrast, by the end of 2011, the US had regained all of the ground it lost since 2008. The figures suggest that Europe is well into what could be a lost decade - a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens.
Economic growth that is not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.
"There are larger implications that people don't think about," said Rupert, a professor of economics at the University of California, Santa Barbara.
"There is a huge decline in human capital." Just what signals the beginning and end of a recession is not always easy to pinpoint.
One common definition is two consecutive quarters of falling output. By that standard, the eurozone is technically not yet in a recession. Most economists agree, though, that a recession is also defined by other indicators like unemployment, industrial production and investment.
The closest Europe has to an arbiter on the question is a committee of prominent economists convened by the Center for Economic Policy Research, a research organization in London.
By the committee's estimate, the eurozone's last recession ended after the second quarter of 2009, the point at which the region hit bottom and began to grow again.
The panel, known as the Euro Area Business Cycle Dating Committee, has not yet begun to consider whether the eurozone is in recession again.
But few people would argue that Europe, stricken by a self-inflicted debt crisis that began in 2010, has basked in prosperity recently.
"This is more than just a regular business cycle," said Carl B Weinberg, chief economist at High Frequency Economics in Valhalla, NY "I can't think of a time in the postwar period in any major industrial countries where we have had a downturn resume before the previous cycle was over."
Only Germany is wealthier than it was in the first quarter of 2008, when economic activity peaked. France is close, according to Rupert and Cooley, a professor at the Leonard N. Stern School of Business at New York University.
The two publish a blog that tracks the business cycle, at europeansnapshot.com. Spain and Italy are both effectively back where they were in the darkest days of 2009, after the collapse of Lehman Brothers set off a financial crisis that undermined the world economy.
indiatimes.com
But by some measures, the downturn has been under way for years.
With the exception of Germany, none of Europe's biggest economies have returned to the level of economic output they had at the beginning of 2008, before the subprime mortgage crisis in the United States spread across the Atlantic, according to calculations by two US economists, Peter Rupert and Thomas F Cooley.
In contrast, by the end of 2011, the US had regained all of the ground it lost since 2008. The figures suggest that Europe is well into what could be a lost decade - a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens.
Economic growth that is not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.
"There are larger implications that people don't think about," said Rupert, a professor of economics at the University of California, Santa Barbara.
"There is a huge decline in human capital." Just what signals the beginning and end of a recession is not always easy to pinpoint.
One common definition is two consecutive quarters of falling output. By that standard, the eurozone is technically not yet in a recession. Most economists agree, though, that a recession is also defined by other indicators like unemployment, industrial production and investment.
The closest Europe has to an arbiter on the question is a committee of prominent economists convened by the Center for Economic Policy Research, a research organization in London.
By the committee's estimate, the eurozone's last recession ended after the second quarter of 2009, the point at which the region hit bottom and began to grow again.
The panel, known as the Euro Area Business Cycle Dating Committee, has not yet begun to consider whether the eurozone is in recession again.
But few people would argue that Europe, stricken by a self-inflicted debt crisis that began in 2010, has basked in prosperity recently.
"This is more than just a regular business cycle," said Carl B Weinberg, chief economist at High Frequency Economics in Valhalla, NY "I can't think of a time in the postwar period in any major industrial countries where we have had a downturn resume before the previous cycle was over."
Only Germany is wealthier than it was in the first quarter of 2008, when economic activity peaked. France is close, according to Rupert and Cooley, a professor at the Leonard N. Stern School of Business at New York University.
The two publish a blog that tracks the business cycle, at europeansnapshot.com. Spain and Italy are both effectively back where they were in the darkest days of 2009, after the collapse of Lehman Brothers set off a financial crisis that undermined the world economy.
indiatimes.com
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