It's official: This is a recession
Yeah, that's a no kidding, Kenneth, headline. But until today the Business Cycle Dating Committee at the National Bureau of Economic Research hadn't declared a recession, which meant if you wrote "this is a recession" in a column people accused you of being a devious, anti-Bush partisan. Gee, it really was a recession.
I still think the NBER knew this months ago but waited until after the election to make the official pronouncement. "That's just completely wrong," Harvard economist and Business Cycle Dating Committee member Jeffrey Frankel told me in August. "If the verdict were clear - and one can imagine it becoming clear - of course we would declare a recession before the election."
Comments
According to Keynes, the root cause of an economic downturns is an insufficient aggregate demand. When the total demand for goods and services declines, businesses throughout the economy see their sales fall off. Lower sales induce firms to cut back production and to lay off workers. Rising unemployment and declining profits further depress demand, leading to a feedback loop with a very unhappy ending.
http://nomedals.blogspot.com
Posted by: Jason | December 1, 2008 9:55 PM