People usually think recessions are bad. Are they in fact necessary? Akin to naturally occurring small forest fires…those are good otherwise there could be a mega fire.
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They’re only necessary if other things make them necessary. Like in your example, too much brush builds up in the forest. And in the stock market example, after a long period of zero interest rates, a lot of wasteful companies appeared and didn’t actually produce anything. And the economy will be healthier if they are killed off in this cycle.
Of course, if you have a very healthy forest where brush doesn’t build up, you would plausibly not need fires. And if you had a perfectly healthy economy where wasteful companies didn’t appear, then we wouldn’t need recessions to get rid of them. Nature is healing, reversion to the mean.
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