Since 1950 and before 2007, the way to bet was that, whatever the current gap between U.S. real GDP and potential output was, the U.S. economy would close 2/5 of that gap over the course of the next year with roughly neutral policy. Unusually stimulative policies given the state of the economy would push it up; unusually contractionary policies given the state of the economy would push it down; but the way to bet was that the output gap in a year would be only 60% of its current value, in two years 35%, in three years 20%.
Then came 2008.
Real GDP fell 7.5% below potential output. But--in spite of policies that would have been classified as very stimulative indeed back in 2007--the economy did not then bounce back, closing 2/5 of the gap vis-a-vis potential in each year. Instead, over the past four years the gap has been closed at a pace of only 1/12 per year--and that gap-closing has been accomplished not by real GDP growing faster than the pre-2007 trend but rather by potential output growing more slowly post- than pre-2007.
And toward the end of 2012 two shifts took place in macroeconomic policy: