Boom and Bust: Why Recessions Hit Harder the Longer We Wait
The article presents a theory that suggests the longer it has been since the last recession, the more likely and severe the next recession will be. This is because during economic booms, companies may hire less productive workers, leading to a higher number of bad worker-firm matches. As a result, when a recession hits, there is a larger drop in employment. The study analyzed US economic data from 1969-2011 and found that the longer the time between recessions, the bigger the impact on employment during the recession.