What Recovery?

Tyler Cowen isn't ready to declare the recession over:

Many countries, including the United States, are making plans on the basis that China will continue to grow robustly and that the European Monetary Union will hold together. In reality, China has had 30 years of rapid growth; historically, developing countries tend to have periodic booms and busts and so China is overdue for a slowdown. The country also has a real estate bubble and lots of excess capacity. A partial break-up of the eurozone would bring considerable economic and financial volatility, with potential fallout for the United States.

None of these problems is behind us and in the meantime we are suffering under uncertainty. That’s part of the reason why the recovery has been so unspectacular. In part it looks like a recovery only because things were, for a while, so extremely bad. I don’t yet think of us as being in a true recovery mode at all.

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