Double Dip?

verfasst von Popeye, 09.08.2002, 10:54

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Economic cycles

Will there be a double dip?
Aug 8th 2002
From The Economist print edition


America may be set for a"double-dip" recession.
It wouldn't be the first time.

Get article background

CAPITALISM is ever
prone to cycles. Back
in 1837, Lord
Overstone, a British
economist, described
the economy's
"established cycle"
from a"state of
quiescence" through
"growing
confidence...overtrading,
convulsion, distress"
finally"ending again
in quiescence". Over
150 years later, his description remains apt. But what
if some parts of the economy grow in confidence
prematurely, before the economy as a whole has
returned to quiescence? Lord Overstone had no term
for it. Today's market watchers do:"the double dip".

Double-dippers, such as Stephen Roach of Morgan
Stanley, believe the springtime recovery was a false
start-the economy will contract again before a
sustainable recovery begins. They have history on
their side. Five out of the past six recessions
featured more than one dip; the long recessions of
1973-75 and 1981-82 turned out to be triple-dippers.
Why should the current cycle escape with just one?

Lord Overstone could describe the vicissitudes of
commerce as an"established cycle" only because the
economy's vast ensemble of markets and industries
keep roughly in time-they rise and fall in concert. A
double dip occurs when one section of the ensemble,
usually inventories, gets ahead of the score.
Inventories fall fast in a downturn: why refill the
warehouse when you're worried about clearing the
shop shelves? But they also bounce back early-no
manager wants to forgo sales because his shelves
are empty. The hasty rebuilding of inventories will
pull the economy out of its initial dip, but if the rest
of the economy has yet to hit bottom, the reprieve
will be temporary. Inventory demand will peter out
just as the final demand for goods has what Mr Roach
calls a"relapse". Inventories have to be cut: the
economy dips for a second or third time.

Have inventory managers got their timing wrong
again? Certainly, the current cycle is peculiarly
difficult to read. Most post-war cycles follow a clear
rhythm conducted by the Federal Reserve. Recessions
begin when the Fed raises interest rates to kill
inflation, subduing labour, housing, and stock
markets at the same time. But Alan Greenspan, the
Fed chairman, did not orchestrate the last
contraction, and the cycle is not so tightly
synchronised. Business investment collapsed but
Americans mostly kept their jobs, and what they lost
in the stockmarket, they partly regained in a property
boom. Until now the American consumer has kept up
a merry jig in counterpoint to the sombre tempo of
the rest of the world's economy.

Last year's recession, Mr Roach argues, was a mild
leeching, not a full purging of the excesses of the
1990s. Household saving rates are still too low,
house prices too high, and the current-account deficit
too wide. A double dip gives a second chance to
"correct" these imbalances. It may take another spell
of convulsion and distress before America's defiant
spendthrifts become the"quiescent" savers Lord
Overstone and Mr Roach would like to see.

Quelle: Economist


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• Double Dip? - Popeye, 09.08.2002, 10:54