which economists do not agree. Growth potential is not constant in the absence of a crisis. A pre-crisis trend estimated over a relatively long period may under-state pre-crisis growth potential and therefore overlook post-crisis damage if productivity growth was accelerating prior to the crisis. Recall the new economy argument that US productivity growth accelerated around the middle of the 1990s due to the adaptation to new information and communications technologies. If there really was and is a new economy, then attempting to measure the trend rate of growth over a longer period will underestimate it. Alternatively, measuring pre-crisis growth over a shorter period, say as growth between the two immediate pre-crisis business-cycle peaks, creates the danger that estimates of the trend will be distorted by peculiar features of the cyclical expansion and the unsustainable growth that sowed the seeds for the crisis itself. This approach will tend to over-estimate pre-crisis growth and exaggerate the damage. It is no surprise, then, that studies seeking to identify changes in trend growth before and after crises reach a variety of conclusions.Third, there is little agreement on the relative importance of the mechanisms through which major recession and financial distress may impact long-term growth potential. Some analysts emphasize the danger that investment will fail to recover because the return to capital will have fallen permanently as a result of the crisis and the misallocation of pre-crisis investment. Financing constraints will be tighter because bank balance sheets have been impaired, because borrowers have less collateral, and because of tighter regulation. Finance being harder to come by, there may be less investment in research and development and related activities that throw off positive externalities for growth. Other observers emphasize the pernicious effects of the policy uncertainty that inevitably arises in a crisis and its aftermath. The list goes on. Public debt loads will be higher in the wake of a crisis: this implies higher taxes and interest rates. Structural and hard core unemployment will rise, causing skill acquisition on the job to suffer. Labor force participation will be discouraged. The long-term unemployed will become demoralized and apathetic. Finally, there is the danger that, the problems that brought on the crisis not having been dispatched, instability may be back.2In the remainder of this paper, I will argue that progress on determining whether growth potential been impaired will occur through research on specific mechanisms through which recession and financial distress affect growth capacity. I will suggest that historical evidence from earlier episodes like the 1930s, when the recession was deep, the crisis was global, and financial distress was pervasive, is a promising source of information on the issues at hand.On the basis of this evidence, I will argue that there is little reason to think that the long-term growth potential of the advanced economies has been significantly impaired, at least insofar as such damage operates through the standard economic channels. Neither financing constraints, nor public debt burdens and structural unemployment was a binding constraint on long-term economic growth in the wake of the Great Depression. Insofar as the conclusions carry