Structural or Cyclical?
November 15, 2011
Last evening I heard an interesting interview on Bloomberg TV. I do not remember the names of the participants, but what was being discussed caught my attention. One interviewee stated that this recession was not a cyclical recession such as we have approximately every ten to twelve years. He stated that what was different this time was that it was a structural recession.
I am not an economist so the discussion was a bit beyond me. However, I did look up "Structural" in Wikipedia. Here is what I found out.
"Structure is a fundamental, tangible or intangible notion referring to the recognition, observation, nature, and performance of patterns and relationship of entities."...."The description of structure implicitly offers an account of what a system is made of: a configuration of items, a collection of inter-related components of services..."
From these definitions, I could grasp what the interviewee was suggesting. This recession is changing the way private banks, the government sponsored entities (Fannie Mae and Freddie Mac) and the securities markets operate. Added to the changes in our national institutions is the rise of a global marketplace. If it is the structure that has been brought down by this recession, the rebuilding may be what is prolonging the recovery.
Interesting thought!
Last evening I heard an interesting interview on Bloomberg TV. I do not remember the names of the participants, but what was being discussed caught my attention. One interviewee stated that this recession was not a cyclical recession such as we have approximately every ten to twelve years. He stated that what was different this time was that it was a structural recession.
I am not an economist so the discussion was a bit beyond me. However, I did look up "Structural" in Wikipedia. Here is what I found out.
"Structure is a fundamental, tangible or intangible notion referring to the recognition, observation, nature, and performance of patterns and relationship of entities."...."The description of structure implicitly offers an account of what a system is made of: a configuration of items, a collection of inter-related components of services..."
From these definitions, I could grasp what the interviewee was suggesting. This recession is changing the way private banks, the government sponsored entities (Fannie Mae and Freddie Mac) and the securities markets operate. Added to the changes in our national institutions is the rise of a global marketplace. If it is the structure that has been brought down by this recession, the rebuilding may be what is prolonging the recovery.
Interesting thought!
posted by shirley harry at 8:46 AM
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