The instability of the GDP growth rate in the zero to two percent range has sometimes made it very difficult for the Federal Reserve to effectively fight inflation without pushing the U.S. economy into a recession. The following year financial returns have also been positive after a decline in real GDP expressed in 1992 dollars of minus .4 percentage points or more. Since the stock market crash of 1929 the best years to have owned common stock, on the average, have been years containing a recessionary trough in economic activity. The most protracted period of investment optimism, as indicated by a long series of positive error terms for our the accelerator model, occurred over the eight year period from 1977-84 and may have helped to support another great bull market during the 1980s. The real value of business investment in producer's durable equipment increased by about 58 percent from 1991-96.
T denotes years containing a trough in business activity.
All of these financial returns have been positive.