Daily VideoJune 24, 2009
What Will the Economic Recovery Look Like?
Since late 2007, the U.S. and global economies have been in a prolonged recession. How long will this downturn last? When will the recovery come? How can we see the recovery? These are just some of the questions that leading economists are trying to answer.
Some economists are looking at the shape of a recovery in terms of which letter of the alphabet it will resemble.
In this piece NewsHour economic correspondent Paul Solman talks with Simon Johnson of the Massachusetts Institute of Technology to understand how we graph a recession and its corresponding recovery. Then, leading economists weigh in on the shape they think the recovery will take. Will it look like a V, W, or U?
“The only basic rule is deep recessions are followed by steep recoveries. That’s precisely what a V-shaped recovery is.” Michael Mussa, Peterson Institute for International Economics
“This to me is — it feels like we’re in a W-shaped recovery. It feels as if we’re now at the apex of the middle, and it feels as if the next leg is potentially back down again.” Robert Rennie, Currency Strategist
Warm Up Questions
1. What is a recession?
2. When was the last recession in the United States?
1. Which shape do you think this recession will take? Why do you think that?
2. Did any of the economists in the piece change your mind on the shape of the recovery? What arguments worked for you?
3. How do economists make these predictions?
4. Seeing these economists work, does that make you want to become an economist? Why or why not?
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