THE DAILY TELEGRAPH: There is a growing risk that the global economy will move from the 'Great Recession' into the 'Great Stagnation', according to economists at Goldman Sachs.
Stagnations typically mean long periods of sluggish growth of about 0.5pc, low inflation, rising and sticky unemployment, stagnant house prices, and lower returns on shares, they said.
There is a 40pc chance of the current situation developing into a period of stagnation among developed economies, Goldman calculated.
"Trends in Europe and the US are so far still following growth paths that would be typical of stagnations," they said in a note.
"Given those risks, whether these countries manage to avoid a ‘Great Stagnation’ by a pick-up in the recovery is likely to depend on policy being able to restore confidence and putting in place reforms that can decisively jolt growth". » | Angela Monaghan, Economics Correspondent | Friday, September 30, 2011
'Great Stagnation'? What a load of cobblers! 'Great Depression,' more like! And just who are the people who played a large part in this mess? And just what do they mean when they talk about a period of low inflation? Inflation is already running pretty high, despite the economy in a deep recession, sliding toward depression.
Best to ignore the Mickey Mouse economists at Goldman Sachs. They're all waiting for their fat bonuses. However bad the depression will be, they'll see to it that they and theirs are well-provided for. – © Mark
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