International institutions and economists across the world have been raising alarm bells over the global economy slipping into recession.
But while the collapse in economic activity is clear, there are historical examples to suggest that this is not a recession. Instead of a recession, we have just experienced a long, government-dictated public holiday, Bilal Hafeez of MicroHive writes. The real test for the economy will be after it has re-opened fully.Visit Business Insider's homepage for more storiesThe International Monetary Fund says it's the worst recession since the Great Depression. No, the worst in 300 years, says the Bank of England.
US stocks would suggest otherwise – they are almost unchanged on the year. But that could just reflect central bank support, rather than the real economy. What does the average person on the street think? Well, according to US confidence surveys, most haven't changed their expectations around jobs losses for the coming year despite the apparent depression.
Take August in Italy. The country tends to grind to a halt as everyone goes on vacation. But as data is seasonally adjusted, we don't see the collapse in economic activity. If we look at the non-seasonally adjusted data, we do see sharp collapses in activity . The same can be said about the Chinese New Year in China – as factories shut down for an extended break each year we see electricity consumption collapse ).
Interesting take. I think the conclusion is not fully supportable and overly optimistic.
Not sure that the millions of people without jobs would call this a holiday.
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