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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The thing about modern economics is that it’s a pretty recent concept of human history. The stock market has been around for just over 200 years. The industrial revolution and factory goods in the 1800s shifted how we consume goods. We used to measure the economic health of the country primarily by statistics like employment rates and average income, now we measure it primarily by how Wall Street is doing.
We know that small fires can help forests because we’ve spent thousands of years observing nature. We can imitate the natural processes we observe and recreate them in controlled experiments, because the environmental factors which cause forest fires are pretty consistent.
We have not had that same length of time to study economics, and the economy is full of other variables that keep changing as our technology changes. So the most honest answer is “we just don’t know” and “it depends on how/if the recession inspires policy changes to lift people out of the recession.”
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