by Jeffrey P. Snider
Alhambra Partners
Orthodox economic theory assigns recession to some exogenous “shock.” Without it, an economy is supposed to grow indefinitely along its trend or potential baseline so long as NAIRU (non-accelerating inflation rate of unemployment) is maintained. As you can imagine, economists and policymakers spend most of their time on that latter part which is one reason, though more so ideology, that they ignore the questionability of the former assumption. In very simple terms, any positive number and a great many still negative are taken as evidence of “growth” precluding recession. Absent a “shock”, there are no other orthodox options.