It could decrease as spending on research and development declines, and as workers' jobspecific human capital is lost as they find employment in different sectors. It could also increase if, for example, the recession weeds out the less-productive activities associated with a pre-crisis "bubble economy," or stimulates efficiency gains through changes in work practices.
•  There is also evidence that recessions associated with financial crises are more severe and more protracted than other recessions, and that a financial crisis negatively and permanently affects potential output – as highlighted in a recent paper by Carmen Reinhart and Ken Rogoff.