Newspaper article THE JOURNAL RECORD

'Slow-Growth Economy' Predicted for 1990

Newspaper article THE JOURNAL RECORD

'Slow-Growth Economy' Predicted for 1990

Article excerpt

A few weeks after the stock market collapsed last October, a trio of academics expressed deep reservations about the consensus forecast, which in its mildest form included a 1988 recession.

While popular forecasters talked in dire tones, the trio said they weren't convinced the crash would have a long-term negative impact. Spenders might hesitate for a while, they said, but they wouldn't take to the bomb shelters.

That is precisely what happened, of course, to the dismay of some big names in the forecasting business.

Seth Hymans, Joan Crary and Janet Wolfe of the University of Michigan stood their ground, and that makes their views on 1989 and 1990 worth a serious and generally satisfying look.

They foresee no recession in 1989, and none in 1990 either, although in the latter year ``a vulnerable, slow-growth economy'' must be watched closely by monetary officials.

For 1989, they foresee real growth at a rate of 3.2 percent for the first quarter of next year, as the economy rebounds a bit from the negative impacts of the 1988 drought.

Growth of gross national product is forecast at a rate averaging 2.3 percent for the second and third quarters of next year, and at a slightly lower 2.1 percent for the final quarter of the year.

The Michigan forecasters say the continuation of economic growth - call it the absence of recession, if you choose - drives from two principal factors:

- Export growth is seen as continuing to outpace import growth, though by a smaller margin than in either 197 or 1988.

- Business capital purchases are likely to continue strong, as the demand for U. …

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.