Prepare for an unusual kind of downturn

Yet if a worldwide slump happens in 2020 it may fall into that category—because it will have been caused primarily by the trade barriers erected between China and America.

History offers little guidance as to what a trade-war recession looks like, or what the right policy response is. Nor, it seems, is economic theory much use. It predicts that tariffs, like all supply-side disruptions, will be inflationary. In fact the most visible effects of the trade war to date have been declining business confidence, a global manufacturing slump and tepid investment. Inflation expectations have been falling, as have long-term interest rates.

Turnover among top global officials is a further source of uncertainty. Christine Lagarde is taking over at the ECB. Though she shares the doveishness of her predecessor, Mario Draghi, she will struggle to hold together the central bank’s governing council as its northern members become ever more agitated by negative rates and bond-buying. Britain is due a new Bank of England governor to replace Mark Carney.

Either way, American monetary policy will enter a period of flux. In 2020 the Fed will finish a review of its monetary-policy framework. It will probably commit to targeting 2% inflation on average over the economic cycle as a whole, rather than all the time. Tolerating inflation overshoots after a downturn should allow it to fight a slump more aggressively.

More gibberish from the bourgeois economist. Impiricism at its worst. There are no 'quick fixes', Socialist Revolution is on its way !!

But not the US stock markets...

This must be one of the dumbest tweets by the dumb Economist in recent memory. Global economy is improving, interest rates are dropping and both China and USA sound quite optimistic about a deal.

one of the biggest risks is high personal debt/income personal loans to consolidate credit card debt is becoming concerning

It's not a 'trade' war. It's a China dominance war...

Ah shit here we go again, this time with climate disaster and overpopulation

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Prepare for an unusual kind of downturnECONOMIC EXPANSIONS are most often killed off by rising interest rates or financial crashes—surprises that cause economy-wide demand for goods and services to fall. Rarer is the supply-side recession in which economies are deprived of their productive capacity. Not since the oil-price shocks of the 1970s has there been a global downturn that can be attributed primarily to supply. everything you have written about the trade war so far has been dead wrong. As expected all the actions are going to show up in 2020. Kind of like when you told us about this....
Source: TheEconomist - 🏆 6. / 92 Read more »

Prepare for an unusual kind of downturnECONOMIC EXPANSIONS are most often killed off by rising interest rates or financial crashes—surprises that cause economy-wide demand for goods and services to fall. Rarer is the supply-side recession in which economies are deprived of their productive capacity. Not since the oil-price shocks of the 1970s has there been a global downturn that can be attributed primarily to supply. Butcherbladebunny ونتر_وندرلاند 27NParoNacional LMAO I feel like you probably tweeted this exact thing out a year ago and included '2019' instead of '2020' The USA debt held by China is one big contributing factor.👆👆.
Source: TheEconomist - 🏆 6. / 92 Read more »