Austan Goolsbee: You Never Know When a Recession Will Sneak Up on You: "The 2001 recession developed when the internet bubble popped.... But... the internet accounted for, at most, about 2 percent of the economy then. If we use the logic we’ve been applying to trade wars and government shutdowns, it would seem that popping the internet bubble shouldn’t have been enough to cause a recession. But it did...

...The reason it did was that the pop freaked out people outside just the internet sector.... Virtually every recession in the last 40 years coincided with a signal of fear, like a significant drop in consumer confidence. Sometimes confidence fell and didn’t spiral into recession, but all recessions have started with a confidence spiral.... Let us all hope for excellent jobs numbers in the months to come, along with a rebound.... But it would be a mistake to be overconfident.... If something scares people enough, it can start a recession, and you probably won’t know until it’s too late.... The great pitcher Satchel Paige once advised: 'Don’t look back. Something might be gaining on you'. Had he been an economist, he might have added, 'And don’t start a trade war, either'...


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