"The American economy is slipping into its second post-bubble recession in seven years."
So writes Stephen Roach, Morgan Stanley's official doomster and chairman of Morgan Stanley Asia, in today's New York Times. I don't agree - and neither do some of the other contributors in today's issue:
You Can Almost Hear It Pop, by Stephen S. Roach
The Facts Say No, by Marcelle Chauvet and Kevin Hassett
Bet the House on It, by Laura Tyson
Not if Exports Save Us, by Jason Furman
Nobody Knows, by James Grant
Wait Till Next Year, by Martin Feldstein
University of California Riverside's Marcelle Chauvet and American Enterprise Institute's Kevin Hassett are not too pereturbed. They are the co-authors, with James Hamilton, of the forthcoming Calling the Business Cycle. Their model suggests there is no reason to panic just yet:
According to the model, the probability that the American economy was in a recession in October, the last month for which we have data, was only 16.5 percent. This is high enough to make us nervous about the future, but it is low enough that we can be fairly sure that if a recession is going to be visible in the data, it did not begin until November at the earliest.