Tags: robert shiller | recession | trump | economy

Yale's Robert Shiller: Recession Could Discredit Trump

Yale's Robert Shiller: Recession Could Discredit Trump

By    |   Monday, 14 October 2019 05:59 PM

Nobel laureate Robert Shiller warns that while the U.S. is far overdue to plunge into recession again, growing investor distrust of President Donald Trump will only make matters worse.

“There will be a recession. The question is when,” the Yale economics professor recently explained to Time.com.

“I’m tempted to say that we’re overdue for one, because this expansion will be the longest in history. That’s assuming the economy isn’t already in recession,” said Shiller, the co-founder of the Case-Shiller Index, which tracks home prices around the nation.

“I think the talk of the recession is building up. The stories are coming in which are probably related to the trade crisis. And it’s going back to a 1930s narrative about a tariff war, a trade war. It’s unsettling people. It’s causing some people to curtail their spending. Distrust of President Trump is building,” said Shiller, who was awarded the Nobel Prize in Economic Sciences with Eugene Fama and Lars Peter Hansen in 2013.

Shiller said Trump is constantly generating news, essentially using an old trick in a new arena.

“It’s what he did on his TV show. He would send people into conflictual situations, and then he would fire them at the end of the show. It’s a little bit like the wrestling that he was involved with, where he actually appeared in a wrestling TV show, punching another man. It’s what he knows,” said Shiller.

“If we start a recession, it will discredit him. And public opinion could turn against him, and make him seem not so invulnerable.”

Meanwhile, Bloomberg News reported that the chances of a U.S. recession within the next 12 months is now at 27 percent as economic-slowdown fears have grown in recent months amid a persistent trade war with China, pullbacks in corporate hiring and investment and a manufacturing sector that has already slipped into contraction.

The recession probability model developed by Bloomberg economists Eliza Winger, Yelena Shulyatyeva and Andrew Husby incorporates a range of data spanning economic conditions, financial markets and gauges of underlying stress. Some indicators, like the yield curve, are flashing warning signs. Others, like real wage gains, not so much.

Forecasting just when a recession will begin is notoriously difficult, but as a downturn nears, indicators flash clearer warnings. Because different indicators show signs of strain at different points, the heat map below reflects the chance of a recession at various points in time, with each focusing on a different set of indicators.

Many define a recession as two consecutive quarters of negative growth. The official dating committee at the National Bureau of Economic Research takes a more holistic approach, defining a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months.”
Recessions are usually accompanied by a swift increase in the unemployment rate. The jobless rate differs greatly between downturns depending on the breadth and severity of the recession. While unemployment peaked at 10% in 2009, and rose even higher in the early 1980s, other downturns have brought still-painful but smaller increases in the jobless rate.

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
Nobel laureate Robert Shiller warns that while the U.S. is far overdue to plunge into recession again, growing investor distrust of President Donald Trump will only make matters worse.
robert shiller, recession, trump, economy
513
2019-59-14
Monday, 14 October 2019 05:59 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved