The economy: How long will the expansion last?

Posted: August 15, 2014 in economy
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The economy


Weighing the evidence



NEWS that America’s economy grew at a brisk annualised rate of 4% in the second quarter was greeted with relief. After a puzzling first-quarter contraction, growth has returned, though the recovery remains the weakest since the second world war. As of June, the expansion is now five years old, longer than the post-war average of 58 months (see chart 1).
The next recession could in theory be around the corner. But unlike people, business expansions don’t die of old age: they are killed by an unpredictable shock, says Bob Hall, an economist at Stanford University and chairman of the academic panel that dates American business cycles: “The next recession will come out of the blue, just like all of its predecessors.”

Recessions have become rarer in recent decades. The three expansions preceding the 2008 crisis lasted on average for 95 months. For that, economists …

via Economic Crisis


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