Policymakers should be war gaming the worst scenario because never before has a single signature by a single individual raised the probability of recession so sharply.
In these unprecedented times, one thing’s for certain: if anyone expresses certainty about what’s about to happen, then they have no idea what’s about to happen.
Paraphrasing Paul Samuelson, one of the greatest economists ever to have lived: economists have predicted nine out of the past five recessions. To be honest, none of us knows whether a recession is or is not about to happen.
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Steven Hamilton is assistant professor of economics at George Washington University and visiting fellow at the Tax and Transfer Policy Institute at the ANU.
