Is a Recession Coming? Poole College Finance Professor Explains
There has been much discussion about whether the United States is slowly moving towards another economic recession in the coming years. Richard Warr, professor of finance and associate dean for faculty and academic affairs, provides his expert opinion into the signs that could signal one.
“We are seeing some early signs of a possible slowing or contraction of the economy,” said Warr. “These signs are slowing employment growth, slowing growth in GDP, and the inverted yield curve.”
Other hints of a recession come from pressure from around the world driving the contraction in the economy. Economic weakness in Europe, Brexit and trade barriers are among the recessionary forces Warr sees affecting the United States.
Warr said the effects of a possible recession are an increase in unemployment, lower wage growth for the employed, and slower to stagnant asset price growth. However, Warr believes that any potential recession would be weaker than most think after compared to the infamous financial crisis of 2008.
“In the 2008 recession, we had a slowdown but we also had a confounding problem which was the collapse of the mortgage market and that led to the failure of a good number of banks,” said Warr. “We’re not seeing that problem as much now, the banking system is much more stable so I think that today’s recession or slow down will be less dramatic.”
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