Economic versus Fiscal Recovery.

• Position: Brief article

The Rockefeller Institute of Government has made available a presentation that describes why an economic recovery might not feel like a fiscal recovery for governments. The presentation, titled "Recession, Recovery and State-Local Finances," was made to the Forecasters Club of New York in late January. Points made include the following:

* Employment and wages can lag gross domestic product (GDP) recovery, as can non-wage income. (In the last thee recessions, real wages took three to 16 quarters longer than GDP to reach its prior peak.)

* Fiscal lag is partly perception and policy choice--spending rarely declines along with tax revenue, and states patch...