Posted on Friday, September 11th, 2009
By the Center for Geoeconomic Studies
In a typical post-war recession, recovery would be well under way after twenty-one months. This time around, all that has emerged is limited optimism over ‘green shoots.’ Although conditions in financial markets have improved (e.g., the spread between AAA corporate debt and treasuries has narrowed by over 150 basis points since November 2008), the labor market has continued to deteriorate. The chart below indicates that the increase in unemployment since this recession began is worse than all post World War II recessionary spikes in unemployment.
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Posted in 2008/9 Downturn, Economic Cycle, U.S. | 1 Comment »
Posted on Tuesday, June 9th, 2009
By the Center for Geoeconomic Studies
The collapse in U.S. trade associated with the current downturn far exceeds the fall in any other post-war recession. It tracks the fall in trade observed in the 1930s, though there are now signs of stabilization. So far this collapse has been driven by economic factors, such as the decline in demand and trade financing, but as the world economy contracts the risk of protectionism increases.
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Posted in 2008/9 Downturn, Economic Cycle, Trade | 1 Comment »
Posted on Tuesday, April 14th, 2009
By the Center for Geoeconomic Studies
The WTO has forecast that world trade will decline by 9% this year, the largest fall since World War II and the first decline since 1982. The severity of the contraction in world trade not only exceeds the post-WWII recession average, but is also deeper than in any post-war recession. In response, G20 leaders extended their agreement not to impose protectionist trade barriers to the end of 2010 and promised $250 billion in trade finance.
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Posted in 2008/9 Downturn, Economic Cycle, Trade | 0 Comments »
Posted on Monday, April 6th, 2009
By the Center for Geoeconomic Studies
The current downturn is now sharper than most post-war recessions. Comparisons with the depression are rising, but there are important differences too. The policy response has been quicker this time. The federal budget deficit has expanded much more quickly than during the Depression, reflecting government bailouts and stimulus. In the current downturn, it took only about 12 months for the U.S. budget deficit to decline by more than 5%, while during the Depression it took nearly three years to do so. The hope is that bold government action can prevent a rerun of the 1930s.
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Posted in 2008/9 Downturn, Economic Cycle, Fiscal Policy, U.S. | 1 Comment »
Posted on Thursday, January 29th, 2009
By the Center for Geoeconomic Studies
As our chart indicates, the U.S. budget deficit is expanding at its fastest rate in the post-war era. Obama’s proposed fiscal stimulus will add to this deficit. This aggressive fiscal response is meant to offset a sharp contraction in GDP. As our updated CGS indicators package shows (see right hand column), the 3.8% fall in the fourth quarter is unlikely to mark the end of the downturn.
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Posted in 2008/9 Downturn, Economic Cycle, U.S. | 0 Comments »
