Major Recessions: Britain and the World 1920-1995

Major Recessions: Britain and the World 1920-1995

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In the twentieth century there have been five major recessions: two in the interwar period, and three more starting 1973, 1979, and 1989. This book focuses on events in the UK, but sets them in their international context and makes frequent comparisons with other countries. Major recessions happened at a similar time in all major countries, and the lessons are general. Three main conclusions are reached: (1) major recessions reflect abrupt fallings off in demand, not supply; (2) these are due to identifiable demand shocks and by swings in consumer and business confidence which amplify the direct effects of demand shock; (3) major recessions are not predictable. In the final chapter, Christopher Dow puts forward an insider's view on how to avoid future severe recessions: action must be taken to control booms, which if uncontrolled will lead to a period of bust, and once a major recession has begun, fiscal and monetary policy must be adjusted to mitigate the downturn. Often unpopular with economists, this is the line which many governments and central banks take: Major Recessions will help them to have more success.fluctuations.23 World commodity markets a€” though among the most perfectly competitive of marketsa€” also display much the same ... Prediction of events now treated as exogenous To its practitioners forecasting may appear a bold game, but the kind of forecasts usually ... Foot (1987), Dornbusch and Frankel (1987) and Ito (1990) for the foreign exchange market; and Schiller (1988) for the stock market.

Title:Major Recessions: Britain and the World 1920-1995
Author:Christopher Dow
Publisher:OUP Oxford - 1999-01-07


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