“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news. We could slide down again in the fourth quarter.”
Normally, I don’t get too excited when some economist or another makes these proclamations. However, Feldstein is not your ordinary economist. He was, up until recently, the head of the National Bureau of Economic Research. And he was very forthcoming in 2007 about the housing mess. Last year, he openly discussed the likelihood of a recession. He also dissed the government’s GDP inflation and employment data. (my kinda guy).
So when Feldstein starts talking double dip, I consider his analysis very closely . . .
Here’s an excerpt:
“The U.S. recession may not be coming to an end and there is a risk the economy may experience a “double-dip” contraction, said Martin Feldstein, a professor of economics at Harvard University.
The economy could “flatten out” or “even be positive” in the third quarter, and then it’s likely to contract again in the last three months of the year as the effects of the federal stimulus program wear off and companies finish rebuilding inventories, he said.
“There isn’t going to be enough to sustain a really solid recovery,” he said, even though recent data has provided some “good news” on the economy. . . “
Ignore him at your own risk . . .
Martin Feldstein on the Housing/Credit/Economic Mess (September 12th, 2007)
Feldstein Says U.S. Economic Indicators ‘Pointing Down’
(May 31st, 2008)
Feldstein: U.S. ‘Sliding’ Into Recession (May 7th, 2008)
Harvard’s Feldstein Sees Risk of ‘Double-Dip’ Recession in U.S.
Bob Willis and Betty Liu
Bloomberg, July 21 2009
Misleading growth statistics give false comfort
FT, May 7 2008 18:54