TIP137: Jim Rickards - Interest Rates and Central Bankers
We Study Billionaires - The Investor’s Podcast Network
Understanding Depressions and Recessions
Depressions and recessions are differentiated by more than just duration of declining GDP. In a depression, there can be growth, but it is below trend growth, resulting in a long-term output gap and loss of wealth. The current state of the US economy is considered a depression, leading to concerns about the next recession. The Federal Reserve's challenge is to raise rates sufficiently to combat the next recession without causing it, a dilemma arising from past decisions to delay rate increases in favor of unorthodox policy experiments.
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