Newspaper article The Christian Science Monitor

Taking Shots at Today's 'Golden Age.'

Newspaper article The Christian Science Monitor

Taking Shots at Today's 'Golden Age.'

Article excerpt

Quite frequently these days some economist speaks of a "New Economy" or a "Golden Age" in the United States.

Not Victor Zarnowitz. The veteran expert on the business cycle is skeptical of today's widespread euphoria for the economy.

"The arguments in favor of a new Golden Age are not persuasive," says Mr. Zarnowitz, now with the Foundation for International Business and Economic Research in New York. Recession will happen again, he concludes. Yet he refuses to say just when. The current economic expansion celebrated its eighth anniversary in March. Most economists don't see any end to it yet. So it could become the longest of all expansions next year. The leading indicators, a statistical index designed to forecast turns in the economy, dipped slightly in April. It was also reported last week that construction spending fell sharply in April. On the good news side, a monthly survey of purchasing managers found strength in industry. Further, sales of new homes and automobiles surged. "Those waiting for the sky to start falling are craning their necks in vain," proclaims Jerry Jasinowski, president of the National Association of Manufacturers in Washington. Nothing lasts forever Zarnowitz doesn't see an immediate end to this "long and noninflationary expansion" either. "But it is not going to last forever," he cautions. The economist began research on business cycles in 1954 at the National Bureau of Economic Research in New York, working with two pioneers in the field, Wesley Mitchell and Arthur Burns. Dr. Burns became chairman of the Federal Reserve during Richard Nixon's presidency. Zarnowitz now points to hard-to-detect "random elements" in the economy that can bring growth to a halt. One risk, he sees, lies in the stock market. There has been a "massive influx of inexperienced investors." They could panic with a solid, prolonged "correction," Zarnowitz says. Or there could be a decline in corporate profits that would depress capital investment and stop growth. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.