16 May 2010

MACROECONOMICS: Fear Of A U.S. Double Dip Recession Could Cause It.

NYTIMES/ OPINION/         Economist Robert J. Shiller/ "The risk of a double-dip recession hasn’t abated, even after news of the huge European bailout in response to the Greek debt crisis." And..."In fact, there is still a real risk of a double-dip recession, though it can’t be quantified by the statistical models that economists use for forecasts. Instead, the danger stems from the weakness and vulnerability of confidence — whose decline could bring markets down, further stress balance sheets and cause cuts in consumption, investment and local government expenditures.
Ultimately, the risk resides largely in social psychology. It is the fear of fear itself, of which Franklin D. Roosevelt famously spoke."