The weakness was a result of the failure of the recession of 2008-9 to destroy or devalue sufficient unprofitable capital, or deleverage enough debt, to ensure a strong rebound in profitability. Back in 2010, I wrote that the developing recovery, then in its initial stages, would be “weak, fragile and uncertain”. The argument here is that this optimism is likely to be misplaced. The Financial Times’s Martin Wolf described a world economy “humming” with growth, while Gavyn Davies welcomed “tentative signs that secular stagnation is beginning to fade”. Nonetheless, many commentators saw 2018 as the year in which the economy would finally lift itself out of this malaise. It is in this context that figures such as Larry Summers, former US president Bill Clinton’s treasury secretary, talk of entering an “age of secular stagnation”, while Christine Lagarde, head of the International Monetary Fund, speaks of “a new mediocre” for the capitalist system. The negative impact on GDP averaged 10 percent. A recent analysis of the United States economy, still the largest in the world, estimated that in the 2008-2015 period there was an average annual 20 percent shortfall in fixed capital investment due to the crisis. However, while the recession technically ended long ago, the world since then has been locked in a phase of development markedly different from that which preceded it. On a global scale, the recession that developed in the wake of the collapse of the Wall Street bank Lehman Brothers in autumn 2008 was over after a year. It is now a full decade since the financial turmoil that heralded the beginning of the “long depression”.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |