Big Think presents a new series from leading global economists: When Will the Recession End?
A death knell for investing, the end of easy credit, the emergence of a regulatory government, socialism. However it's spun, the media frenzy surrounding the recession is as exhausting as the recession itself.
The recession offers all kinds of epistemological questions about our rapacious needs and desires. But there are few more fundamental propositions right now than the most obvious one: when will the recession end?
Big Think recently approached five leading American and international economists for their best predictions on when we will be out of this mess. Watch for their commentary in the Big Think blog in the coming days. After you get their takes, you can start X-ing days off the calendar.
The first prognostication is from Daniel S. Hamermesh, the Sue Killam Professor in the Foundations of Economics at the University of Texas at Austin. Hamermesh's work on macroeconomics has spanned forty years. He has lectured at over 200 universities in 46 states and 27 foreign countries. His seminal text, Labor Demand, was published in 1993. In his 2006 title, Economics Is Everywhere, Hamermesh pens 400 vignettes to illustrate the ubiquity of economics in everyday life. He is also a regular contributor to the freakonomics blog at the New York Times.
So, Professor Hamermesh, when will the recession end?
"The average U.S. recession, from peak to trough, has lasted only about 12 months since the 1940s. Even the double recession of the early 1980s was from January 1980 to November 1982, and that included a significant recovery after July 1980. So I would be very surprised if the economy keeps sliding beyond this summer, since the recession began in December 2007.
That doesn't mean, though, that things will improve greatly. The stimulus package might help accelerate things, but even that depends on when, and whether, and how, all the funds are spent. More important would be whether financial markets--markets for lending--unplug themselves, so that businesses and individuals can borrow more readily. When that happens, then things should start improving.
Overall, though, I would be very surprised if we get back below 5.5 percent unemployment any time before 2011, if even then."