Is a new global recession impending? A bunch of mainstream and leftist Keynesian economists were asked their opinion by the UK’s Guardian newspaper. As far as I can read it, only one was forthright that a global recession was coming, although this was Albert Edwards who has been forecasting this for six years and even now when the recession was coming was not specified. The others hedged and fudged and were unable to get off the picket fence.
My position has been it is the job of economics to make forecasts just like any other science, even if that is much more difficult with social sciences where human decision-making is involved. But just like weather forecasting, your forecasts will be only as good as your theoretical foundations and empirical research. Based on Marx’s laws of motion under capitalism, profitability, debt and investment are key indicators of boom or slump. On those indicators, as I have argued in previous posts, a global recession is coming.
And as I argued at the beginning of this year, the timing of that has got much closer; maybe this year, but probably by the end of 2017 at the latest.
There was a batch of economic data out today that confirmed that the global economic expansion since the end of the Great Recession in mid-2009 was in trouble. The ‘recovery’ since then has already been the weakest since the 1930s.
Now data for the last quarter of 2015 from major capitalist economies showed that economic growth, as measured by real GDP growth, was slowing. In preliminary figures for the US economy, the most important and fastest growing of the major economies, in Q4 2015, real GDP rose only at a 0.7% annual rate, sharply down from the 2% pace recorded from Q3 2015. That meant the US economy had expanded in real terms (after inflation is deducted) by 2.4% in 2015, the same rate as in 2014. But the worrying sign was that in Q4 2015, the yoy rate was only 1.8%, virtually the same rate as the UK economy…
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