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April 20, 2009
When the recession ends, then what?
Many economists are predicting the recession will finally end near the close of this year. But what exactly does it mean for the recession to end? Does it mean that, economically speaking, all of a sudden, everything is fine? Listen
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Think of this vision in your mind. Think of a recession as you or some fictitious person falling down a hole. And as long as you're falling deeper and deeper, the recession is occurring . . . the recession is getting worse and worse. Now, if you stop falling, that's what economists mean by the recession ending. That means the economy has stopped getting worse. It does not mean, to continue our analogy, that all of a sudden you're back on top. You're out of the hole. No, it just means you've stopped falling. You still have to take time to climb your way out of that hole. And, indeed, that's what happens when a recession ends. It means the economy has stopped getting worse. It doesn't mean that all of a sudden, it's back to where it was before the recession. It will still take time for the economy to grow and actually get back to where it was before the recession began. And many economists - one very prominent one being Fed Chairman Ben Bernanke - have predicted that once this recession ends, it may take up to two years for the economy to get back to where it was before the start of the economic downturn."
Posted by Dave at April 20, 2009 08:00 AM