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Beetlejuice, Beetlejuice, Shsh!!
Say it thrice and it comes real -Recession
Economics is complicated; it is more psychology than science and sociology than psychology. The fear of recession usually leads to behaviours by the actors that eventually trigger a recession. The CEOs who are afraid of the possible oncoming “recession” and reduce hiring, the employees who see this and reduce the spending, the businesses who see this and reduce ordering and capex. The cycle keeps expanding making it a self-fulfilling prophecy.
The word has started appearing again now in the context of the tectonic policy shifts and trade realignments in the USA. An economy that was chugging along pretty strongly now again has the fog of recession slowly clouding business and personal decisions. President Trump has to just tell this one more time for this to be realised; it seems too close to comfort.
The Butterfly Effect or the Tariff Effect
The world economy is so tightly integrated and interconnected that a butterfly effect in one part can trigger unexpected avalanches in other places. The US President is not that subtle regarding policy changes; every word from him is an elephant herd rampage through major world economies. Tariff is an economic tool and this means ultimately also a political tool. Tariffing out Ukraine is having this…
