April 8, 2020

Can we avoid a socially explosive recession?

The numbers are staggering: the risks of a depression.

75% of the US households have seen their income decrease. India reached 25% unemployment. A European recession could reach 8%. The new Japanese emergency might reduce the output next month by 20%. China will record its slowest growth in modern history.

They will add to the sharp reduction of economic growth and a massive debt increase that took place since the financial crisis. We are on the verge of the cliff: a possible depression. In an article on the risk of depression, Barron’s writes: During the Great Depression, for example, U.S. economic output shrank 8.5% in 1930, followed by 6.4% and 12.9% decline, respectively, in 1931 and 1932. By 1933, the four-year contraction had left the economy only half the size it was in 1929. Read More

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