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Caroline Baum: The ‘new normal’ of slow growth is growing old, with no end in sight

Ten years ago at their annual forum, executives at Pacific Management Investment Co. coined the phrase the “new normal” to describe what they expected to be a period of below-average growth following the Great Recession and financial crisis.

Their forecast was correct. The recovery from the recession was slow and shallow. It took 3 1/2 years for the level of real gross domestic product to exceed its 2007 peak.

Pimco’s predicted three-to-five years of below-trend growth evolved into something more protracted, the past year’s modest improvement notwithstanding. And it appears that, short of some new, new thing that ushers in the next productivity wave or comprehensive immigration reform that encourages labor-force growth through initiatives such as a start-up visa, the new normal will be with us for a while longer.

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