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The bursting of the housing bubble in 2008 plunged the U.S. economy into a serious crisis, leaving American households with a huge debt overhang and the economy with a large gap in output and employment. This report reviews the economy’s deleveraging and recovery experience more than five years after the crash. It explores the following questions.

• How far has the economy come in the deleveraging process? Is private sector debt now at a sustainable level or do households and the financial sector continue to need to pay down debt?
• To what extent has the U.S. economy recovered from the large plunge in output and employment? How close is the economy to full employment?
• What kind of recovery has the U.S. economy had? What has driven the recovery and has it become self-sustaining?
• How has the recovery affected the long-term growth potential of the U.S. economy? Has it made U.S. economic growth less dependent on debt-financed and wealth-driven consumption?
• To what extent does policy explain the kind of recovery the U.S. economy has had? What were the main shortcomings of policy?

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