“The end of the world appears to have been postponed. We’ve had an extraordinarily terrible crisis though we’ve probably hit bottom as world output has turned positive.”
-Paul Krugman, Princeton University
>
A few bullet points from Krugman’s comments in Helsinki:
• The U.S. may have emerged from recession at the end of July or in August
• Growth may be returning after 4 consecutive Qs of negative GDP — the longest contraction since record-keeping began in 1947.
• U.S. has $1.1 trillion in annual capacity “staying idle.”
• The world has become “highly subject” to financial bubbles;
• There was a “remarkable” willingness to ignore signs of the bubble — or more politely, to fail to recognize it.
I believe the NBER made a mistake in the dating of the 2001 recession — they tagged it as over November 2001 — too soon, based on the subsequent employment data. The trough wasn’t for some time.
I suspect we won’t see a similar error this time, and that implies the official mark of the recession being over may be later than many economists (including Krugman) believe.
>
Source:
Krugman Says ‘End of the World Postponed’ as Economy Hit Bottom
Kati Pohjanpalo
Bloomberg, Sept. 21 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=afZhBPNaXu1o
What's been said:
Discussions found on the web: