Over the last few months, New Zealanders have been faced with economic hardship; next quarter, new PM Chris Hipkins must prepare for the recession to hit.
Every government with debt on hand, and especially those with debt levels that are already unsustainable, must get to work on a contingency plan for the coming recession.
Although some countries have recovered, overall economic activity has been disappointing. To make matters worse, a closer look at capital formation—a.k.a., business investments—and consumer spending suggest that a recession is in fact just around the corner.
Some forecasters believe that inflation will persist for an extended period of time. I disagree, and if the signs of an inflation peak are as strong as I believe they are, then Europe could be out of this inflation episode before next summer.
A conservative system of benefits protects citizens from destitution, but to succeed, the definition of poverty needs to be overhauled. The Heritage Foundation is moving in this direction, and their ideas could positively impact European welfare policy.
When a currency depreciates, it can lead to a self-reinforcing outflow of capital—especially when the depreciation is unprecedented. The euro has never been this weak against the dollar.
While it is correct that a recession is defined by two consecutive quarters of declining GDP, it is not correct that the American GDP declined two quarters in a row. Unfortunately, all the economists and analysts who made the recession call were wrong.
