Carmen Reinhart and Kenneth Rogoff wrote one more paper comparing the past crises with the current one. This time they focus on what happends to the real economy after the crisis. Here is what they found, it is consistent with IMF research presented in October issue of WEO.

“First, asset market collapses are deep and prolonged. Real housing price declines average 35 percent stretched out over six years, while equity price collapses average 55 percent over a downturn of about three and a half years. Second, the aftermath of banking crises is associated with profound declines in output and employment. The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Output falls (from peak to trough) an average of over 9 percent, although the duration of the downturn, averaging roughly two years, is considerably shorter than for employment. Third, the real value of government debt tends to explode, rising an average of 86 percent in the major post–World War II episodes, amid collapsing tax revenues.”

Depressed? Here is a link to some fun reading.