Here’s an interesting point from Mark Doms, chief economist at the Commerce Department. The Commerce Department’s economists seem to consistently underrate the severity of recessions:
I wonder why that is? But there seems to be a lesson here for macroeconomic stabilization policy, namely that when your data is indicative of a recession the risks ought to be seen as weighted to the downside. You need to err on the side of “going big” with your interest rate cuts and whatever else.