{"id":47986,"date":"2019-08-26T16:55:31","date_gmt":"2019-08-26T21:55:31","guid":{"rendered":"https:\/\/olduvai.ca\/?p=47986"},"modified":"2019-08-26T16:55:38","modified_gmt":"2019-08-26T21:55:38","slug":"the-anatomy-of-the-coming-recession","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=47986","title":{"rendered":"The Anatomy of the Coming Recession"},"content":{"rendered":"\n

The Anatomy of the Coming Recession<\/a><\/h3>\n\n\n\n

Unlike the 2008 global financial crisis, which was mostly a large negative aggregate demand shock, the next recession is likely to be caused by permanent negative supply shocks from the Sino-American trade and technology war. And trying to undo the damage through never-ending monetary and fiscal stimulus will not be an option.<\/p>\n\n\n\n

NEW YORK \u2013 There are three negative supply shocks that could trigger a global recession<\/a> by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy.<\/p>\n\n\n\n

The first potential shock stems from the Sino-American trade and currency war<\/a>, which escalated<\/a> earlier this month when US President Donald Trump\u2019s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the US and China over technology. In a rivalry that has all the hallmarks of a \u201cThucydides Trap<\/a>,\u201d China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth. The US has placed the Chinese telecom giant Huawei on an \u201centity list\u201d reserved for foreign companies deemed to pose a national-security threat. And although Huawei has received temporary exemptions allowing it to continue using US components, the Trump administration this week announced<\/a> that it was adding an additional 46 Huawei affiliates to the list.<\/p>\n\n\n\n

The third major risk concerns oil supplies. Although oil prices have fallen in recent weeks, and a recession triggered by a trade, currency, and tech war would depress energy demand and drive prices lower, America\u2019s confrontation with Iran could have the opposite effect. Should that conflict escalate into a military conflict, global oil prices could spike and bring on a recession, as happened during previous Middle East conflagrations in 1973, 1979, and 1990.<\/p>\n\n\n\n

\u00a0\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

The Anatomy of the Coming Recession Unlike the 2008 global financial crisis, which was mostly a large negative aggregate demand shock, the next recession is likely to be caused by permanent negative supply shocks from the Sino-American trade and technology war. And trying to undo the damage through never-ending monetary and fiscal stimulus will not […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[188,2240,1917,588,8402,1264,805,827],"class_list":["post-47986","post","type-post","status-publish","format-standard","hentry","category-economics","tag-currency-war","tag-global-financial-crisis","tag-nouriel-roubini","tag-oil","tag-project-syndicate","tag-recession","tag-trade","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47986"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47986\/revisions"}],"predecessor-version":[{"id":47987,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47986\/revisions\/47987"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}