Poll: Is this a recession or a depression?
On February 6th, I started a poll asking whether the global economy was experiencing a recession or a depression. In the interim, I have tried to stay neutral on the issue.
Now it is time to close out the poll. Below you can add your vote. I will release the final results tomorrow.
[poll id="2"]
About Edward Harrison
- IMF Head Strauss-Kahn uses the D-word Depression 9 Feb 2009
- Depression in Japan 2 Feb 2009
- What is an economic depression? 9 Feb 2009
- Worse than the Great Depression 1 Oct 2008
- Picture of the day: Depression 100M Ahead 6 Oct 2008
I voted small ‘d’ depression. Certainly from a UK perspective it will be as bad as the 1930 in data terms. UK GDP ‘only’ fell 5% in the early 1930s. Lack of social provision then made the effects worse than would happen now for a similar contraction.
I think the biggest issue is not the amount the economy contracts at the nadir, but the rate of recovery. Which traditionally after reccessions has been quite rapid. I suspect this time there will be no rapid rebound. No more easy credit to boost consumer spending. Consumers will be scared off borrowing at all. There will be a sea change in outlook. Debt will be socially unacceptable. Living within ones means will be the new black. And that will make the depression/recession seem to drag on forever.
As a very perceptive friend of mine has said – ‘I see nothing but grey skies ahead. It will be a very negative, gloomy time for all’