What are key economic mechanisms explaining long term damage during Great Recession can you tell me what could be key economic mechanisms that explain long-term damage of the Great Recession?
Big recessions produce mass unemployment and for long periods. People can get demotivated, and lose skills and training. As the economy evolves, new skills are needed and unemployed people might lose that. That is a long term damage. Think of all the youngsters in Spain, coming out of the university, ended up working in bars and other low skill jobs. That's not only demotivating but also bad for their human capital.

That's one example I can think of.