councilor.org
| Source | Jim Devine |
| Date | 02/01/30/00:06 |
| Doug writes:>So, translating into demotic English - one of the most
aggressive easing streaks in Fed history will have no effect, and there will be no recovery anytime soon?< the cuts have already had an effect in the U.S.: they propped up the asset values of housing and the stock market, which has so far prevented the recession from being worse. To my mind, we may have a recovery (in the U.S.), but it won't be fast enough to keep unemployment rates from continuing to rise for a year or two. Further, in line with Godley/Izureta analysis, excessive private-sector debt (and U.S. external debt) and the synchronization of a lot of countries' recessions make it quite likely that this recovery will part of a "Dubya-shaped" process, i.e., a temporary boom that follows a recession and is followed by another (as with the temporary 1981 boom). Private sector debt becomes more important if unemployment continues to increase. |
Copyright (c) 1998, Joongpil Cho