Thursday
Apr162009
IMF: The Recession May Not Be Over
By Jonathan Bronstein, Talk Radio News
The International Monetary Fund (IMF) released the last 2 chapters of their twice yearly World Economic Outlook (WEO). The report discovered that economic recessions of this global scale generally last 2 years. While this may make people feel optimistic, but when one realizes that the IMF economic recession began in June 2008, the report becomes more sobering.
Therefore, America is still in the thick of its recession.
“Recessions associated with financial crisis are longer and more severe,” said Marco Terrones, a key contributor to the IMF’s economic outlook, who has researched 160 recessions since 1960, and made distinctions between those related to the financial industry and those caused under other circumstances, like manufacturers overproduction.
The IMF believes that the recession began in June 2008, while the Bureau of Labor and Statistics says it began in December 2007. Thus, according to historical data discovered by the IMF, the recession should last until 2010.
But, this report was an analytical study of history and not an economic forecast, which will be released later this April.
Through this research, Terrones discovered that recessions caused by a failure of financial institutions last two years, or 2 quarters longer than all other recessions, and recovery takes about 3 years.
However, the statements made were not a prediction of the future, but a systemic analytical review of 20th century economic history. Also, only 6 recessions like this have occurred so the sample size is incredibly small, according to the IMF researchers who worked on the study.
“The twist of the current crisis is that bank lending linkages are the main driver,” said Stephan Danniger, another contributor to the IMF outlook WEO. As a result, the crisis quickly spread around the world, but nations that had the most connection to Western European banks were most vulnerable.
“The main recipient region was emerging Europe, and in a sense it is no surprise that an emerging Europe was the first to be hit hard by the crisis,” said Danniger.
Danniger stressed that countries, especially emerging ones, should continue to become integrated into the world economy because it is the most effective way to grow ones economy. But, such integration makes these nations vulnerable to external recessions.
So those who hope that the world is beginning the recovery process of the recession must heed the IMF assessment, that “recessions are likely to be unusually severe, and economic recovery will be sluggish,” said Terrones.
The International Monetary Fund (IMF) released the last 2 chapters of their twice yearly World Economic Outlook (WEO). The report discovered that economic recessions of this global scale generally last 2 years. While this may make people feel optimistic, but when one realizes that the IMF economic recession began in June 2008, the report becomes more sobering.
Therefore, America is still in the thick of its recession.
“Recessions associated with financial crisis are longer and more severe,” said Marco Terrones, a key contributor to the IMF’s economic outlook, who has researched 160 recessions since 1960, and made distinctions between those related to the financial industry and those caused under other circumstances, like manufacturers overproduction.
The IMF believes that the recession began in June 2008, while the Bureau of Labor and Statistics says it began in December 2007. Thus, according to historical data discovered by the IMF, the recession should last until 2010.
But, this report was an analytical study of history and not an economic forecast, which will be released later this April.
Through this research, Terrones discovered that recessions caused by a failure of financial institutions last two years, or 2 quarters longer than all other recessions, and recovery takes about 3 years.
However, the statements made were not a prediction of the future, but a systemic analytical review of 20th century economic history. Also, only 6 recessions like this have occurred so the sample size is incredibly small, according to the IMF researchers who worked on the study.
“The twist of the current crisis is that bank lending linkages are the main driver,” said Stephan Danniger, another contributor to the IMF outlook WEO. As a result, the crisis quickly spread around the world, but nations that had the most connection to Western European banks were most vulnerable.
“The main recipient region was emerging Europe, and in a sense it is no surprise that an emerging Europe was the first to be hit hard by the crisis,” said Danniger.
Danniger stressed that countries, especially emerging ones, should continue to become integrated into the world economy because it is the most effective way to grow ones economy. But, such integration makes these nations vulnerable to external recessions.
So those who hope that the world is beginning the recovery process of the recession must heed the IMF assessment, that “recessions are likely to be unusually severe, and economic recovery will be sluggish,” said Terrones.
tagged 
Global Crisis, IMF, WEO, recession in News/Commentary
Global Crisis, IMF, WEO, recession in News/Commentary
Reader Comments (1)
I thought I would add this comment as it seems to fit pretty well with your topic.
I recently started a new business (I know, not the best time) and have been using the Google Analytical Data Tool so that I can keep my eyes on traffic.
Well, whilst going through the motions of checking terms and phrases for our new site I found myself being drawn into typing in keywords of none related items to my industry.
Mortgage, Finance, Bank Loans, and so on. The strangest thing that I didn't expect to find was the increase in traffic for sites offering these services.
Lets hope that the confidence starts to take a turn and others who write about "How the recession is not improving" find some other way of scare mongering people into believing that the world is close to an end.
Give people some hope and things like buying and confidence will start to improve. (Don't you think?)
Thanks for allowing responses to your posts.
Regards
Darren