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Real output and prices fell precipitously.
Nominal income in turn is the product of real output and prices.
The figure shows the money supply and real output over the period 1900 to 1945.
Monetary and fiscal stringency left real output lower in 1928 than in 1918.
From 2007 to 2010, real output declined by 0.3% per year on average.
Real output growth topped 4% a year from 1997 to 2000.
When recession hits, real output falls but prices tend to adjust more slowly.
Real output growth would probably have slowed even as nominal output stayed high, leading to a rise in inflation.
During a period of catch-up, inflation would probably run above the desired rate, as would real output growth.
In the euro area, by contrast, real output was about 2.5% below the end-2007 level, and falling.
Not coincidentally, real output grew in the second quarter of that year.But from August of 2008, real rates shoot up.
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