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Monday 23 March 2009

What caused the recession?

Do you have a view on what caused the recession? If so, why not contribute at The Spectator Enquiry. It looks like an interesting project and I found this comment from "Rosa Klebb" interesting:
"I don't know where to put this, and as a typical blogger more adept at writing than reading, I don't know if this has been asked:

'No more boom and bust' - OK we can see the bust, but where exactly was the boom?? Was Brown half right (shudder)?

We have had a massive asset price boom in property, but the economy as a whole has not boomed at all. GDP growth has been pretty unimpressive. The question is this: why did the massive surge in money supply, Government borrowing/spending, personal borrowing, equity release, and immigration, not result in hyperbolic GDP growth?? Did we export our growth to China? Has it been absorbed by net falling productivity due to a bloating public sector? Was it pumping up our houses, and is now hissing out? If all this liquidity failed to produce any GDP increase above long term trend, can we expect the current attempted massive liquidity splurge to work??

I demand my boom"

Good question...

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