Home | News |

Oscar Jorda, Travis Berge, and Early Elias in the Wall Street Journal--Warns of High Recession Risk for U.S.

UCD Professor Oscar Jorda, Ph.D. graduate Travis Berge (now Economist at the Federal Reserve Bank of Kansas City) and B.A. graduate Early Elias (now Research Associate at the Federal Reserve Bank of San Francisco) have new research discussed in the SF Fed Economic Letter.

The outlook is growing grimmer for the U.S. economy, as the risk of a new recession fueled by European troubles has risen, a new paper from the Federal Reserve Bank of San Francisco argues.

In the analysis released Monday, the central bank researchers say the U.S. economy is particularly vulnerable to shocks right now. If something were to strike the nation at this time of already weak growth, contracting gross domestic product would be hard to avoid. The most obvious recession trigger is the worsening and unresolved government debt crisis currently roiling Europe, the authors note.

“The odds are greater than 50% that we will experience a recession sometime early in 2012,” the paper states.

“The message is clear,” economists Travis BergeEarly Elias and Oscar Jorda warn. “A European sovereign debt default may well sink the United States back into recession,” and “prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic.”

See the full article at: http://blogs.wsj.com/economics/2011/11/14/san-francisco-fed-warns-of-high-recession-risk-for-u-s/