What do you think? Leave a respectful comment.

The video for this story is not available, but you can still read the transcript below.
No image

Deciphering the Shape of Economic Recovery

When economists discuss economic recovery, it's often in terms of the alphabet. In the latest installment of his Making Sen$e series, Paul Solman explains what phrases such as "V-shaped recovery" or "U-shaped recession" say about the economic outlook.

Read the Full Transcript

  • PAUL SOLMAN, NewsHour Economics Correspondent:

    For the past year or more, the U.S. and global economies have been in the soup. And increasingly, the shape of a recovery is being framed in terms of the alphabet all over the world.

    The most positive shape is brought to you by the letter V.

  • ANALYST:

    Well, certainly the view that it is going to be a V shape…

  • PAUL SOLMAN:

    Another form of recovery is described by the letter U.

  • NOURIEL ROUBINI, Chairman, RGE Monitor:

    … a severe U-shape recession…

  • PAUL SOLMAN:

    Or maybe the U is really an L.

    MICHAEL MUSSA, Peterson Institute for International Economics: Well, the difference between an L and a U is in the eyes of the beholder.

  • PAUL SOLMAN:

    Or maybe it's the letter W.

  • ROBERT RENNIE, Currency Strategist:

    It feels like we're in a W-shaped recovery.

  • PAUL SOLMAN:

    Or the shape could be a little more sophisticated.

  • GEORGE SOROS:

    What I expect is an inverted square root sign.

  • PAUL SOLMAN:

    An inverted square root sign? We'll get to that, too, because, in fact, picturing the possible shapes of a recovery may be a helpful way to understand the possibilities. So we visited friend Simon Johnson, former chief economist at the IMF, at his MIT blackboard for a bit of drawing and drawing out.

The Latest