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February 12, 2009

The unexpected

The beginning of a new year is a time to look ahead and try to make forecasts about what might occur. But rather than talk about the expected, let's discuss the wild cards in today's economy, what might happen that isn't easily predictable. Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, I've been a professional economists for over 30 years, and I have been surprised many times in my professional life and looking at forecasts and finding they didn't really turn out the way we thought. So if we look ahead into 2009, I think in terms of the overall economic growth rate, we could be surprised. There are actually some economists out there who think that we're going to get a faster economic recovery than many think, that low interest rates and all of the additional spending the federal government's doing will actually cause the housing market to pick up faster, and it will bring up the entire economy. So we may be pleasantly surprised. Come spring, the economy may be looking much better. On the other hand, as economists famously say, there are economists who at the other end of the spectrum see this recession lasting well into 2010, really dragging on. Again, the consensus is that it will end sometime in the latter part of this year. International events always lend themselves to the unexpected. We unfortunately now have a shooting war going on in the Middle East, so the Middle East always bears watching. We hope that that doesn't broaden out and have an adverse effect on oil prices. The potential for animosity between India and Pakistan also bears watching. That could have an effect on the international economy, or, on the other hand, peace could break out, which would be welcome news for everyone. That we can only hope for."

Posted by Dave at February 12, 2009 08:00 AM