● Recession: The Real Reasons Economies Shrink and What to Do About It
Tyler Goodspeed
Interview with author via CNBC
Q: You say recessions are unforecastable. What does that mean? There are a lot of people who try to predict them.
A: In a nutshell, it means recessions are about shocks, and they are shocks we can neither fully anticipate nor effectively hedge against. We have tools to predict recessions, like the yield curve. But when you actually test these tools on the historical record, there are a lot of false positives and false negatives. I’ll admit, I still look at the yield curve just to take a look. I’m not a believer in astrology, but I still take a peek at my horoscope now and then.
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