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Monday, January 04, 2010

Krugman: 30% to 40% Chance of 2010 Recession

by Calculated Risk on 1/04/2010 11:55:00 PM

From Bloomberg: Krugman Sees 30-40% Chance of U.S. Recession in 2010 (ht many thanks!)

“[A recession] is not a low probability event, 30 to 40 percent chance,” [Paul] Krugman said today in an interview in Atlanta, where he was attending an economics conference. “The chance that we will have growth slowing enough that unemployment ticks up again I would say is better than even.”
On the recession probabilities, I think Professor Krugman is warning policy makers about complacency, similar to his Monday column: That 1937 Feeling.

My guess is the U.S. will see sluggish growth in 2010, but will avoid a recession. However I do think the unemployment rate ticking up from the current 10% is a high probability event.