shock

Focus Is On The Pre-recession Condition

Before the Great “Recession” ended the business cycle as we once knew it, there was a widely accepted concept known as stall speed. In the US, if GDP growth decelerated down to around 2% it suggested the system had reached a danger zone of sorts. In a such a weakened state, one good push, or shock, could send the economy [...]

Durable Goods May Not Actually Show Recession, And That Is The Worst Case

By Jeffrey P. Snider|2016-03-28T13:14:31-04:00March 28th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Orthodox economic theory assigns recession to some exogenous “shock.” Without it, an economy is supposed to grow indefinitely along its trend or potential baseline so long as NAIRU (non-accelerating inflation rate of unemployment) is maintained. As you can imagine, economists and policymakers spend most of their time on that latter part which is one reason, though more so ideology, that [...]

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