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January 22, 2008

Frank Lichtenberg: When to Use the Word Recession

Jill Stoddard
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Professor Frank Lichtenberg was quoted in a Washington Post article on whether or not the recent economic downturn warrants using the word recession.

“That's not going to make a great deal of difference to people's economic well-being or their pocketbooks,” Professor Lichtenberg said. “The idea that if you're on one side of the line you're in a recession and if you're on the other side you're fine — that's not really the case. Clearly, we are in a very difficult period.”

Comments

by Michael Manocchio '08 | January 25, 2008 at 10:30 PM

I couldn't agree more. By definition, by the time an economist is ready to call a particular economic environment a recession, you've already been receding for two consecutive quarters.

Getting caught up in the semantics does nothing to help us avoid an economic slowdown but, then again, neither does the Fed artificially propping up our financial markets while simultaneously inflating our currency ... but this probably isn't the blog entry for that particular rant.

by Jack K. Miller | January 30, 2008 at 4:51 PM

The current "crisis" was created by the exaggerated write down of assets that are "money good". Entire pools of mortgages were written down when a relatively few contained slices of "sub prime slime". Exports, manufacturing and employment show that we are not in a recession. Calling this mess a recession glosses over the trick that has been played on the American people.

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