Is the investment trend in the current recession “run of the mill”?

In the last macroblog post, David Altig examined personal consumption expenditures during recessionary periods. Reader Dave Backus, the Heinz Riehl Professor of International Economics and Finance at New York University’s Stern School of Business, sent us a follow-up email asking about other components of gross domestic product, and investment in particular. Good question, so let’s take a look at investment during the current and past recessions.

Earlier this year, the University of Chicago’s Casey Mulligan, writing in the New York Times’ Economix blog, examined real investment trends for the past four recessions and called the current investment trend in this recession “run of the mill.” Employing the same basic idea from our previous macroblog post, below is a chart showing the percentage change from the first quarter to the trough of the last eight recessions, along with the percentage change from the current recession’s first quarter to the first quarter of this year.