It might be better not to talk about it, that is not wood, but the thought had already returned to the recovery, although the recession is not over yet. What will the recovery, when all this will end - rapid or sluggish? We are ready for serious autumn wave of pig influenza, but how great the threat of a second wave of a recession, the terrible double drop? It is generally accepted that today, one year after the start of a recession, the worst is behind us. However, the Bank of England, who recently announced expansion of its program of quantitative easing to £ 75 billion to £ 125 billion, said that "promising signs of slowing down the fall" in need of further fueling. The monthly index PMI, developed by Markit, Research Institute for the supply and demand, less popular than the official data, however, economists are closely monitoring him. According to recent reports, the three main economic sectors - manufacturing, construction and services - have experienced the most rapid decline between November and February. The service sector, ozhivshy one of the first, according to an index PMI, literally a few steps away from a return to growth.
These studies raise an interesting question: Does not paint a grim picture of official figures. Economists Goldman Sachs this way and think. They believe that a very low rate of GDP in the 1 st quarter at -1.9%, will be substantially revised upwards. There is something in common. Freezing capita comparison made between the current recession and its predecessors on the basis of current statistics and the statistics of early episodes are so incorrect that it is almost useless. This does not make people stop them to do, including me, but let me explain why. Official statistics are adjusted, and as a rule, upward. In late 1998 and early 1999 we were on the edge of the first recession era of New Labor, when the GDP remained unchanged at first, but then dropped to 0.1%. Revised data show that while the economy grew by more than 1% in the quarter and did not fit even close to a recession.
However, the revised statistics recession will not force retreat, and there is no doubt that this year will be terrible, maybe even go down in history as the most terrible of all the post-war era. But over time it will look in another way. In March 1992 Norman Lamont had to admit that in 1992 the GDP of Great Britain fell by 2.5%. Today's figures show that the decline was much smaller - 1.4%. A similar situation was in the early 1980's. And for today's data has yet to be traced. Even more interest is the recovery. National Institute of Economics and Social Research (NIESR) in its latest quarterly survey agreed with Alistair Darling about the fact that in 2010 the economy will show growth in the annual ratio. However, analysts believe the institute, it does not exceed 0.9%, and after him, in 2011, followed by an increase of 2.3%. With this in mind, take time until the spring of 2012 in order to go back to where we started in 1 st quarter of 2008. The period between the Olympic Games in Beijing and London will be on the economy of lost time.
It could have been worse. Institute for International Economics Peterson in Washington a month ago brought together two former IMF chief economist, Michael Mussa, and Simon Johnson to discuss the global economic recovery.
Johnson noted that the world is facing a "rebuilding" L-shape: a sharp decline, and lack of recovery in 2010 and subsequent years. Moussa, on the contrary, has supported "the restoration of" V-shaped. "As before, we see a rule Zarnovitsa in action: in a deep recession is almost always a dramatic recovery." Victor Zarnovits, who died in February at the ninety-year life, was one of the best American expert on business cycles and the man who officially shorthand for the duration of recessions. Moussa claimed "V-shaped" recession at this point looks unlikely, but, on the other hand, also looked improbable, and a deep recession a few months ago.
Maybe this will be a double drop at which the apparent resumption of growth, then changing the next recession? Some believe that this time the possibility of such a turn of events greater than ever, as governments and central banks are taking aggressive action to put an end to the recession. These measures are inherently can cause the growth of instantaneous, but it was retained in the private sector must prevail "herd instinct". If this happens, the economy may experience a temporary rise followed by a recession. Recession with a double fall does occur. Based on the statistical understanding of the events of the modern 1970's, four false "dawn" between the start of a recession in late 1973 and the beginning of a long recovery in 1976. GDP is often gave false hopes, temporarily increases and then decreases again.
The famous "green shoots" Lamont appeared in autumn 1991. However, in winter they uvyali, and the recession continued until the spring of 1992, and it was still a long time before we really felt its completion. So what will rise? In Britain, generally Zarnovitsa works. As I said after the publication of the budget, the recovery process in the UK, as a rule, are very active, but after the deep recession in the early 1980's recovery was more rapid than after a moderate recession in the early 1990's, although in both cases the average annual growth over 5 years has exceeded 5%. This time, things can be different, but so far it is not for good reasons. Rebuilding after the 1990 recession was on the background of the growth of taxes, reducing government expenditures, stagnant or falling real estate market and consumer panic. The economy recovered after the recession is beginning the 1980's despite the loss of 1 / 5 of production capacity, which is proportionally the ratio is much greater than the damage this time, the financial services sector.
People are asking what sector of the economy will display the economy from the crisis, but as a rule, this process is more dynamic, and not something limited to one, why central planning does not work here. Sectors until feeders signs of life, yet will not come. Accountants Price Waterhouse Coopers has recently attempted to identify potential leaders of growth, among which were the areas of business services, expensive engineering work, postal and telecommunication services. The risk of a double drop there, but not in the case of recovery of world economy - even pessimistic IMF expects it within the next year. In Britain, an open economy, and she rarely resists, when the rest of the world, all is well. If the bank will raise rates too slowly phasing out the program of quantitative easing, he risks provoking inflation. If this happens too quickly, they risk slip past recovery.
These studies raise an interesting question: Does not paint a grim picture of official figures. Economists Goldman Sachs this way and think. They believe that a very low rate of GDP in the 1 st quarter at -1.9%, will be substantially revised upwards. There is something in common. Freezing capita comparison made between the current recession and its predecessors on the basis of current statistics and the statistics of early episodes are so incorrect that it is almost useless. This does not make people stop them to do, including me, but let me explain why. Official statistics are adjusted, and as a rule, upward. In late 1998 and early 1999 we were on the edge of the first recession era of New Labor, when the GDP remained unchanged at first, but then dropped to 0.1%. Revised data show that while the economy grew by more than 1% in the quarter and did not fit even close to a recession.
However, the revised statistics recession will not force retreat, and there is no doubt that this year will be terrible, maybe even go down in history as the most terrible of all the post-war era. But over time it will look in another way. In March 1992 Norman Lamont had to admit that in 1992 the GDP of Great Britain fell by 2.5%. Today's figures show that the decline was much smaller - 1.4%. A similar situation was in the early 1980's. And for today's data has yet to be traced. Even more interest is the recovery. National Institute of Economics and Social Research (NIESR) in its latest quarterly survey agreed with Alistair Darling about the fact that in 2010 the economy will show growth in the annual ratio. However, analysts believe the institute, it does not exceed 0.9%, and after him, in 2011, followed by an increase of 2.3%. With this in mind, take time until the spring of 2012 in order to go back to where we started in 1 st quarter of 2008. The period between the Olympic Games in Beijing and London will be on the economy of lost time.
It could have been worse. Institute for International Economics Peterson in Washington a month ago brought together two former IMF chief economist, Michael Mussa, and Simon Johnson to discuss the global economic recovery.
Johnson noted that the world is facing a "rebuilding" L-shape: a sharp decline, and lack of recovery in 2010 and subsequent years. Moussa, on the contrary, has supported "the restoration of" V-shaped. "As before, we see a rule Zarnovitsa in action: in a deep recession is almost always a dramatic recovery." Victor Zarnovits, who died in February at the ninety-year life, was one of the best American expert on business cycles and the man who officially shorthand for the duration of recessions. Moussa claimed "V-shaped" recession at this point looks unlikely, but, on the other hand, also looked improbable, and a deep recession a few months ago.
Maybe this will be a double drop at which the apparent resumption of growth, then changing the next recession? Some believe that this time the possibility of such a turn of events greater than ever, as governments and central banks are taking aggressive action to put an end to the recession. These measures are inherently can cause the growth of instantaneous, but it was retained in the private sector must prevail "herd instinct". If this happens, the economy may experience a temporary rise followed by a recession. Recession with a double fall does occur. Based on the statistical understanding of the events of the modern 1970's, four false "dawn" between the start of a recession in late 1973 and the beginning of a long recovery in 1976. GDP is often gave false hopes, temporarily increases and then decreases again.
The famous "green shoots" Lamont appeared in autumn 1991. However, in winter they uvyali, and the recession continued until the spring of 1992, and it was still a long time before we really felt its completion. So what will rise? In Britain, generally Zarnovitsa works. As I said after the publication of the budget, the recovery process in the UK, as a rule, are very active, but after the deep recession in the early 1980's recovery was more rapid than after a moderate recession in the early 1990's, although in both cases the average annual growth over 5 years has exceeded 5%. This time, things can be different, but so far it is not for good reasons. Rebuilding after the 1990 recession was on the background of the growth of taxes, reducing government expenditures, stagnant or falling real estate market and consumer panic. The economy recovered after the recession is beginning the 1980's despite the loss of 1 / 5 of production capacity, which is proportionally the ratio is much greater than the damage this time, the financial services sector.
People are asking what sector of the economy will display the economy from the crisis, but as a rule, this process is more dynamic, and not something limited to one, why central planning does not work here. Sectors until feeders signs of life, yet will not come. Accountants Price Waterhouse Coopers has recently attempted to identify potential leaders of growth, among which were the areas of business services, expensive engineering work, postal and telecommunication services. The risk of a double drop there, but not in the case of recovery of world economy - even pessimistic IMF expects it within the next year. In Britain, an open economy, and she rarely resists, when the rest of the world, all is well. If the bank will raise rates too slowly phasing out the program of quantitative easing, he risks provoking inflation. If this happens too quickly, they risk slip past recovery.
David Smith
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