2019-01 How recessions start (from the Economist)

There will be a lot of talk during the course that a recession is coming. An excellent article from the Economist - a weekly magazine with outstanding business and economics sections, as well as economic data. It is definitely worth reading. You can find it at:

01 the Economist: How recessions start  

The article summarizes how recessions start.            Typically, they start with a shock: an increase in oil price, austerity, financial panic, large increase in interest rates. But sometimes they start when the mood of consumers and investors shift. This is because pessimism is contagious: if consumers become pessimistic about the future and reduce purchases, demand would fall, firms would delay investment plans and unemployment would rise, validating the increase in pessimism.