Noah Smith provoked a conversation here at Angry Bear by wondering what causes recessions. Recessions are not such a mystery when you see the interaction between effective demand and such…

…in getting inflation down very rapidly, but at high costs in terms of unemployment, which persisted because of hysteresis effects. [skip] The 1990 recession can also be linked to left/right…

…recession. Instead, unemployment came down faster than expected, and growth returned, albeit modestly. ” Exactly which Keynesians predicted that sequestration would cause a recession ? I think that as a…

…recoveries and 3 of 4 of the recessions (the 2001 recession being the exception). The singular difference between losses in the Great Recession and the 3 previous ones is that,…

…profits are further increased by only moving downward along the limits, which means that capacity utilization will decrease as unemployment falls. This pattern has existed for decades before a recession….

An economic slump or recession is considered a bad thing by economists. They point to Sweden and blame Sweden for raising its interest and causing a recession. “Bad Sweden, Bad…

…the graph above expands upward during a recession, then contracts downward through a business cycle. When the plot is high, there is more spare capacity that can be utilized and…

…now and then is another recession, one that I fear is likely to be worse than the 2008-09 recession because it is likely to include a spasm of wage-price deflation….

…are great predictors of recessions. Over the last 65 years, (almost) every time real household net worth declined, we were just into or about to be into a recession (click for interactive…

…Graph #2 shows that there is normally enough of a profit rate for a positive difference in favor of corporations to beat the real rate. The Volcker recession of the…