It 'widely accepted that slow-growing economy is likely to tip into recession, for the obvious reason that it is already too close to the line, each shock can hit like a bad thing. And in today's slow growth is at least in part, a symptom of underlying problems, such as consumer debt, high energy prices, and nervousness caused by gambling debt ceiling.
What is more difficult to prove the hypothesis that inertia is not only a symptom of problems, but what causes it. In other words, some economists say, if the economy is growing too weakly, that the slowness in itself could create the conditions that lead to depression. Why? Perhaps the slow undermining consumer confidence and business. Perhaps investors are losing confidence in the recovery of both stock prices already down 9 percent in the high in April, bulletproof. Or maybe the creditors get nervous on the ability of the borrower to pay loans and begin to withdraw from the credit. This reaction can cause a drop that is feared. "When the growth could be quite low, a number of factors can drive, not linear," says Menzie Chinn, an economist at the University of Wisconsin-Madison, and has co-authored a new book, lost for decades.
Debt to the extent that Barack Obama signed on August 2 sets the economy, what could be called a crisis of Christmas: Super if Congress Committee, which must be negotiated with more cuts do not reach an agreement by December 23, cuttings great expense to come into effect automatically, sapping demand for the economy, which is already feeding. Macroeconomic Advisers in St. Louis-based forecasting, said that on August 1, a combination of cuts and spending limits agreed by the required fallback mechanism, if it is enabled, the SAP may be 0.8 percentage points to economic growth in fiscal 2013, which begins in October 2012.
"This economy is very well balanced on the edge", Harvard University economist Martin Feldstein told Bloomberg television interview on August 2. "There are now 50 per cent chance of slipping into another recession." The Federal Reserve chairman Ben Bernanke has referred to his speech, the risk of an economic stall Another metaphor aviation. Stall, the car starts to lose lift and plunge towards the ground.
Fed staff economist Jeremy Nalewaik in April published a document entitled "Predicting recessions using stall speeds," which showed a percent or less growth in the economy "somewhat useful as a warning that the economy is danger of falling into a recession. "The economy grew at an annual rate of just 0.4 percent in the first quarter and 1.3 percent in the second. Nalewaik has not announced what the indicator says now about the likelihood of a recession.
Consumer confidence and business will determine whether the slow growth no growth in pay, said Chris Varvaris, Senior Managing Director of Macroeconomic Advisers. "If companies that things are good, they will continue to hire and invest," he said. "But if they are very safe for the future, the slowdown in initial lead them to put things on hold. If enough companies do you have a down cycle."
The problem is that trust is really terrible, which increases the risk that any new shock to the system may be sufficient to push the economy into recession. The optimism of business is "soft," said varvara: capital goods orders excluding defense and aircraft, increased at an annual rate of 3.5 percent over the last three months, before adjustment for the inflation, down 5.6 percent in the past year as a whole. Institute for the index of the power plant management fell to 50.9 in July, just above the 50 mark that separates expansion from contraction. A dive of this magnitude is announced every six recessions in the past five decades, with only a "false head" in 1984, according to economist David Rosenberg A. Gluskin Sheff & Associates.
Consumers do not respond well either. Retail sales excluding petrol construction materials and vehicles increased by only 2 percent annually over the past three months, compared with a rate of 6 percent in the last half year, Notes Varvara. Consumer Comfort Index Bloomberg is stuck at the bottom of the recession of 2007-09. Consumer spending unexpectedly fell in June for the first time in nearly two years.
Unfortunately, lack of confidence in the prospects of the economy could become a self fulfilling prophecy. This rocket carrying a heavy load.