Joel Prakken, chairman of Macroeconomic Advisers, said this morning that he expects the nation’s economy to grow about 4 percent next year and almost that fast in 2011. That means the recession is definitely over, and Prakken admits that he’s optimistic compared to some other forecasters. But, he says, he’s actually being pessimistic from a historical perspective. Usually, deep recessions are followed by vigorous recoveries, and this recession was the worst since the 1930s. Speaking at a breakfast sponsored by Midwest BankCentre, Prakken put his predictions in perspective:

Based on the historical regularities, you might expect growth in GDP over the next four quarters to be 9.5 percent. Macro Advisers has a forecast of about 3.5 to 4 percent, and we are accused of being wildly optimistic. … We actually think there is some upside risk over the next couple of quarters. We could get a bigger incremental pop over the next couple of quarters than most of us our willing to put in our forecasts.

Unemployment, Prakken said, will probably hit 10 percent by year’s end, remain over 9 percent in 2010 and drop to a little over 8 percent by the end of 2011. In other predictions, he said:

• Inflation will remain low, but that deflation isn’t a danger now.
• The Federal Reserve will keep short-term interest rates near zero until early 2011.
• The housing market seems to have stabilized and should improve next year.
• The dollar’s value will be stable as the U.S. economy starts to recover, but will decline over the long run to correct trade imbalances.