Bernanke’s answer to a question in Wednesday’s press conference was quite interesting:
“We don’t have a precise read on why this slower pace of growth is persisting,” the Fed chairman, Ben S. Bernanke, said Wednesday at a news conference. “Some of the headwinds that have been concerning us, like the weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues, may be stronger and more persistent than we thought.”
As several economists have pointed over the past couple of years, when a financial crisis occurs following years of overleveraged consumption and asset inflation, the economic recovery is bound to be gradual and uneven.
The following paper by Carmen and Vincent Reinhart would be worth reading in this regard:
Relatedly, see this WSJ interview with John Taylor: