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It seems George Bernard Shaw was wrong when he said, “If all the economists were laid end to end, they would not reach a conclusion.” Economists from across the country are in Denver for the National Association for Business Economics, and for the most part, they’re in agreement when it comes to gloomy predictions. The outlook for growth in the United States is weaker than it was in May, say the conference participants, who expect gross domestic product, a measure of the nation’s total economic output, to rise only by 2.6 percent this year, down from an earlier forecast of 3.2 percent, notes the Denver Business Journal.
“This summer’s slowdown has exposed the economy’s sensitivity to wealth losses, the unwinding of debt, and the reductions in economic stimulus,” says NAEB President-elect Richard Wobbekind, an associate dean of the Leeds School of Business at the University of Colorado at Boulder.
Nobel Prize-winning economist Michael Spence theorizes that high unemployment (9.6 percent across the nation and 8.2 percent in Colorado) could continue long after an economic recovery, because while the economy is global, most workers are stuck in their home countries. “We have limited labor mobility,” Spence adds (via The Denver Post). “I don’t know if we’ll need a German-style restructuring of the labor markets with lower wage expectations.”
Meanwhile, Janet Yellen, the Federal Reserve’s new vice chairwoman, has been mum on whether the Fed might raise interest rates, but she’s hinted that if rates remain low for too long, it can pose a risk to the economy (via CNN).