Odds Are – Experts Say the Nation Will Likely Skirt a Recession, but All Bets Are Off
January 8, 2008
Michael Goodman is the managing editor of MassBenchmarks, a quarterly review of the state’s economy published by the Donahue Institute at the University of Massachusetts. He’s hard at work on the latest issue, which will take a comprehensive look at casino gambling and its potential impact on the Commonwealth’s economy — and society in general.
There’s a touch of irony in all this because, as the calendar turns the page to 2008, regional and national economists are sounding a bit like odds-makers as they speculate on whether the nation will fall into a recession, and, if so, how long and deep it will be.
“If I were a gambling man, which I’m not,” said Goodman, who is also current president of a group called the New England Economic Partnership, or NEEP, which produces semiannual economic forecasts for the six New England states, “I’d say that growth slows down over the next several months, but we’re not going into recession in Massachusetts.”
At least not in the technical sense of that word — ‘recession’ is defined as two consecutive quarters of negative growth in gross national product, he said, noting that the less-rigid definition of the r-word (a period of reduced economic activity) will likely lead to considerable debate as to if and when the country slides into a recession.
“I’d say the odds are about 70-30 that we won’t go into a recession,” he continued, noting quickly that there are a number of factors that would make betting on what will happen next year a risky proposition.
These include the ongoing and deepening subprime lending crisis, which is being compared in some circles to the savings-and-loan debacle of the 1980s in terms of its potential consequences to the national economy, as well as an accompanying credit crunch, soaring energy costs (there is persistent speculation that gasoline …
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by: George O’Brien
December 24, 2007