Lombard Street Research discusses ‘the next recession’

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Dario Perkins, chief European economist at Lombard Street Research has published an outlook on the risks of another recession, and suggested that even were it to happen in the near future it would be relatively mild.

The post-War trend is for a recession to strike after every five years of US GDP growth. That means the world is due another recession.

However, historically recessions have taken place linked to a downturn in the credit cycle. However, levels of leverage around the world remain relatively low, so any recession upcoming is more likely to be linked to asset price falls, and be milder in its form.

This is positive news, Perkins suggests, because central banks are not in a good position to fight recession currently without resorting to drastic action, such as renewed and significant amounts of quantitative easing.

To read the full research note click here: The next recession


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