First, a business-friendly climate—market-oriented labor policies and lower taxes—is effective in raising the growth in a state’s gross domestic product and employment. Second, states that suffered the worst employment shocks in the 2007-09 recession had the most rapid postrecession employment growth.
The first finding is self explanatory; the second casts doubt on President Obama's explanation for the slow recovery, the depth of the recession. Lazear's work suggests that the deeper the recession, the faster the recovery.
Lazear is careful to credit Nashville's own Art Laffer who has been saying the same thing for years, along with coauthor Stephen Moore and Jonathan Williams.