Word: economists
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Dates: during 1980-1989
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...survey of 35 economists last week predicted that the economy will expand at a humdrum 2.8% annual rate during the last half of 1987 and a sluggish 1.4% in the first half of 1988. While that is a definite slowdown, it is not quite a dead halt. A few economists, however, predict a recession. Among them is Irwin Kellner, chief economist for Manufacturers Hanover, the New York City banking company, who thinks the U.S. economy will shrink by 2% in the first half of 1988 before quickly recovering...
...slump, because they would reduce the amount of money in consumers' hands. Some worriers go so far as to raise the ghost of Herbert Hoover, who slashed federal spending and persuaded Congress to raise income tax rates sharply in the wake of the 1929 Crash. Says University of Tennessee Economist Paul Davidson: "Cutting the deficit at this particular time would be the worst thing we could do. It would be Hooverism all over again. If the budget cuts proceed, we could slip into another Great Depression...
This, however, is a minority view, rebutted by an even more broadly based coalition. For example, in hearings before the House Banking Committee last week, economists ranging from the very conservative Martin Feldstein to the very liberal John Kenneth Galbraith wrangled about the size and composition of deficit cuts but not at all about their necessity. In this view, the U.S. has about come to the end of its ability to cover giant budget and trade deficits by borrowing from foreign investors. The stock-market crash served as a warning of what would happen if the foreign capital is ever...
...from dependence on foreign borrowing. That course is necessary for other reasons: Japan, West Germany and possibly other exporting countries would need to stimulate their own economies to take up the slack if a lower American trade deficit reduced their sales to the U.S. Rimmer de Vries, chief international economist of Morgan Guaranty Trust, puts the case for such international cooperation succinctly: "A global economy needs global management...
...challenge for the lame-duck government of Prime Minister Yasuhiro Nakasone, who hands over power on Nov. 6 to his successor, Noboru Takeshita. Following Monday's precipitous slump, the Japanese Finance Ministry quietly pressured major trust funds and insurance companies to begin a stock-buying blitz. Most complied, says Economist Kinji Yajima, because "management knows well enough that to ignore such requests is to ask for lots of trouble...