President Obama and U.S. currency are pictured. | Reuters

The 'financial crises' aren’t a valid explanation for the slow recovery, the authors write. | REUTERS

Obama's stimulus delayed recovery



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Unemployment actually recovered faster in countries hit by a “financial crisis” than in those that were in a recession for other reasons. Of the nine foreign countries that the Bureau of Labor Statistics has produced comparable unemployment data for using the same definition of unemployment, Reinhart and Rogoff identify four as suffering from a financial crisis (Germany, Japan, the Netherlands and the United Kingdom) and five that were not (Australia, Canada, France, Italy and Sweden). From January 2009 to December 2011, the unemployment rates in the countries with financial crises actually increased less than in those that avoided such a crisis (0.66 percentage points versus 0.86 percentage points).

The evidence supports the Reinhart and Rogoff claim only if each country’s definition of unemployment is used — but then the rates aren’t comparable. And, unfortunately, their evidence never used comparable unemployment statistics.

Nor did countries suffering a financial crisis experience slower gross domestic product growth during their recoveries. From the third quarter of 2009 , when the U.S. recovery started, the difference in GDP growth between the two sets of nations averaged just one-tenth of 1 percent.