According to the National Bureau of Economic Research, the accepted arbiter of economic cycles in the U.S., there have been a total of 33 economic cycles, periods from peak to trough to peak again or vice versa since 1854, the last occurring from 2007 through 2009 and commonly known as the Great Recession. Ignoring severity or variance between peak and trough, the longest decline was not during the Great Depression, but during what was until the 1930’s considered the worst economic crisis in our nation’s history, from October of 1873 to March of 1879, a period of over five years. At that time, governmental policy options were far more limited and private action from some of the historical captains of private finance and industry was all that saved the U.S. economy from possible collapse. The single longest upward cycle from trough to peak is far more recent, the period from March of 1991 to March of 2001, a ten-year growth cycle. By comparison, the era known as the great Depression actually consisted of a pair of cycles. The first, which led to and then grew from the stock market crash of 1929, consisted of a trough of 43 months until March of 1933, followed by an abbreviated recovery period until May of 1937 and a second trough extending to June of 1938. Although the final recovery and subsequent growth period was aided by the massive industrial activity spawned by World War II, it actually began before the war. Since World War II and consistent with the development of more robust policy options and direct governmental interventions, the pattern of decline and recovery has tilted sharply from prior history with relatively shorter periods of downturn and relative longer periods of recovery and growth. Throughout the past 170 years, the overall average length of the downward cycle, peak to trough, has been 17.5 months, compared to an average upward cycle, from trough to peak, of 38.7 months, somewhat more than twice as long. However, since 1945, the average downturn has lasted only 11.1 months compared to an average upturn of 58.4 months, more than five times as long. Even the most recent Great Recession followed the general pattern. Although the downturn was the longest since before World War II at 18 months, the previous upward cycle had lasted over six years and the recovery and growth period since the Great Recession will certainly be measured at over 10 years once the final determination by the NBER is made. The graph on the following page shows the lengths in months of average cycles and of certain key individual cycles in U.S. economic history from NBER data. The last time the U.S. faced a pandemic of such proportions, the Spanish Flu pandemic of 1918-1919, the disease outbreak corresponded with the conclusion of World War I, which carried economic consequences of its own from the actual military conflict and from the typical post-war disruptions caused by reducing war production and reassimilating soldiers into the private sector. As a result, separating the effects of the pandemic from the other economic effects has been problematic. Added to those difficulties is the limited amount of reliable data on the toll of the disease itself and on economic activity of the era. Record keeping was neither as accurate nor as robust at that time.
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