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Blog Post - Views on the Economy and the World

History Warns Us to Avoid a W-shaped Recession

| May 03, 2020

“Those who do not study history are condemned to repeat it.”  And the rest of us are condemned to repeat George Santayana.

Will the Coronavirus Recession of 2020 be V-shaped?  Or U-shaped?  If we fail to heed the lessons of history it is likely to be W-shaped, with incipient recovery followed by successive relapses into sickness and recession.

As has been widely noted, we would have been better prepared to cope with the Covid-19 pandemic in the first place if everyone had paid more attention to the past history of epidemics. Be that as it may, the world is now deep into the pandemic and its economic consequences, the most severe such events since the interwar period, 1918-1939.  As decision-makers in every country contemplate their next steps, they would do well to ponder the precedents of that interwar period.

Blog Post - Views on the Economy and the World

Seven Reasons China Won’t Yield in Trump’s Trade War

| Apr. 23, 2018

President Trump enacted steel and aluminum tariffs in March, citing national security.  China is the intended target, as most other major suppliers were eventually exempted. On April 2, China retaliated by imposing tariffs on 128 American products (representing about $3 billion of trade), ranging from 15% on fruits to 25% on pork.  Trump April 3 announced 25% tariffs on another 1300 Chinese products [representing some $50 billion of trade], citing forced transfer of US technology and IPR. China on April 4 responded with plans for retaliatory 25% tariffs on 106 US exports -- including soybeans, autos, and airplanes -- to go into effect when the US tariffs do.  On April 5, the White House announced it was considering $100 billion of additional tariffs on China.

If these tariffs go ahead, yes, it is a trade war. How will it end?