Dueling Forecasts
In March of this year, Ed Leamer predicted that the US would narrowly avoid a recession [link via Newmark's Door, still my first read each day]. This forecast clearly reflects updated information, given his discussion over two years earlier, in which he expressed dismay about the US housing bubble and forecast a recession.
But here are two very different forecasts (among the many) about whether the U.S. will have a recession during the next year or so.
- Ironman at Political Calculations posted a graph showing (according to his model) that the threat of a recession has passed.
- At the same time, Steven Pearlstein writes,
So much for that second-half rebound.
Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.
It ain't gonna happen.
Not this summer. Not this fall. Not even next winter.
This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.
Others, especially those at RGE Monitor, tend to share Pearlstein's view. I might, too, but they have been predicting this recession for quite some time. If they are right, how long will we have to wait for it???
Meanwhile, Ironman's model seems to have predicted reasonably well....
