Whisperings of Recession
With the rumors of an possible recession on the horizon, there is
speculation that our economy may be in jeopardy. Alan Greenspan
estimated the odds of a U.S. recession are greater than one in three.It remains to be seen if Bernanke's words will calm jittery markets.
The move comes amid heightened global market concerns, spawned from a broad credit squeeze in the United States. Analysts now question whether debt problems, sparked by an implosion of the U.S. subprime mortgage market earlier this year, could lead to broader economic weakness. The “R” word, recession, has increasingly popped into news stories; Bernanke’s predecessor Alan Greenspan recently estimated (AP) the odds of a U.S. recession are greater than one in three.
Yet even if U.S. consumers pull in their horns, it remains unclear what the effect will be on the global economy. A 2006 briefing (PDF)
by the Royal Bank of Scotland Group argues that other national
economies are “unlikely to emerge unscathed” if the spendthrift U.S.
consumer stops spending. But in a recent interview,
CFR’s Sebastian Mallaby argues that other economies may be ready to
pick up the slack: “If you can have a bit more growth in Europe,
continued extremely fast growth in China and other developing Asian
countries, that kind of thing can make up for American consumption