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How we will know when a recession is coming?

brookings.edu

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Re: How we will know when a recession is coming?

#11

Post by kasey_junk »

anm89 wrote: post #4

This is a really interesting metric but I'm going to argue that it doesn't say that much about our current situation given that our current unemployment numbers are highly skewed due to a strong shift towards low quality part time work and a large number of people opting out of the labor search (who are not considered unemployed in these statistics). I could see an argument made that given that this is statistic is r…

You could use any of the BLS unemployment numbers in a metric line this to see if some of the others were better predictors historically (not sure why they didn’t document that).

If what you are saying is that we are in a historically unprecedented time you’ll note their metric predicted recessions that happened across a wide variety of historical regimes.

Re: How we will know when a recession is coming?

#12

Post by AkaShiroKen »

I watched a Ted talk sometime ago about how they've discovered a method to genetically modify mosquitoes to eradicate entire populations of mosquitoes from an area (I think it was it made them mos babies die due to genetic engineering).

I couldn't find it now but it seemed like a massive success at the time almost eliminating all mosquitoes from the a city in Brazil (iirc).

Anyone know what happened to it? If that were to come to fruition than a lot of disease in addition to malaria like chikungunya, dengue, etc will be cured too.

Re: How we will know when a recession is coming?

#13

Post by gzu »

Why does it have to be just a recession with rebound a few years later? I’d argue many are thinking too positive following 2008 where everything will go back to normal and prices will rally to all time highs. The US economy almost blew up into a full blown depression in 2008. The Fed swooped in to save the day. Can the Fed do that again indefinitely with not only US but potential problems worldwide?

The global economy is reaching uncharted territory now with the amount of debt and negative interest rates.

Maybe a depression like 1930’s are a relic of the past once we decoupled from the gold standard. Central banks today have full power to devalue currency indefinitely in order to maintain the financial status quo.

Re: How we will know when a recession is coming?

#14

Post by nradov »

anm89 wrote: post #4

This is a really interesting metric but I'm going to argue that it doesn't say that much about our current situation given that our current unemployment numbers are highly skewed due to a strong shift towards low quality part time work and a large number of people opting out of the labor search (who are not considered unemployed in these statistics). I could see an argument made that given that this is statistic is r…

Right, unemployment by itself means little unless you have the labor market participation rate for context.

Re: How we will know when a recession is coming?

#16

Post by TuringNYC »

SeeDave wrote: post #3

Will the US economy experience a recession in the next... 100 years? Yes!!!! 50 years? Yes!!! 25 years? Yes!! 12.5 years? Yes! 6.25 years? Yes 3.125 years? Yes? 1.5625 years? Maybe .78125 years? Maybe? .390625 years? No? 0.1953125 years? No 0.09765625 years? No!

This is the best reply. We really don't know, and only greater horizons provide greater certainty of a recession.

Further, we're now in a society where a third of the population lives in a perma-recession where they have not actually recovered from the previous one -- while another section of society lives in permanently good times -- so it is hard to gauge recession from looking around you.

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