James Forsyth

How long will this go on?

How long will this go on?
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The New York Times op-ed page features a string of short articles by various economic and financial figures on when the recession will end. The consensus view is that the American economy will come out of recession late this year. But Roubini and Niall Ferguson offer far more bearish takes.

Roubini warns that

“We now face a 1 in 3 chance that, if appropriate policies are not put in place, this ugly U-shaped recession may turn into a more virulent L-shaped near-depression or stag-deflation (a deadly combination of economic stagnation and price deflation) like the one Japan experienced in the 1990s after its real estate and equity bubbles burst.”

While Ferguson writes

“I find it quite easy to imagine two consecutive years of contraction. And I don’t rule out two more lean years after that.”

As several of the contributors note, we are in uncharted waters and no one can confidently predict what is going to happen next. But it does seem alarming, that the amount of pessimism among experts is increasing not decreasing.

Written byJames Forsyth

James Forsyth is Political Editor of the Spectator. He is also a columnist in The Sun.

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