Re: Re: Re: Recession warnings

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 02:25 AM 09/10/2000 -0400, you wrote:
> I'd say recession predicting isn't very interesting, since it's so
> flaky.  More relevant is Wynne Godley's '7 unsustainable
> processes' thingy, which I take to be more a matter of trends than
> discontinuities.

I don't think there's a big difference between Godley's trends (which can
be found at the Jerome Levy institute web-site) and discontinuities. If
unsustainable debt-accumulation occurs, eventually it reverts back to more
sustainable trends. Because of the nature of our economy, this reversion is
likely to be very painful, a recession or worse.

The difference between current recession predictions and Godley is that the
former is basically informed extrapolation (though some of the
extrapolators are poorly informed and we don't know which ones are
well-informed until after the fact). Godley doesn't extrapolate as much as
point to imbalances in the economy which make recession increasingly
likely. Becaus of his emphasis on probabilities, his "strategic planning"
doesn't try to predict the timing of recession, something that can't be
done IMHO, unless one's lucky.

Jim Devine jdevine@xxxxxxx & http://bellarmine.lmu.edu/~JDevine