Why is it important whether we are or are not in a "recession"? I have read a technical definition of the word, and I have seen and heard many news reports in which economists and government officials opine on whether we are or are not in a recession. What is resting on that determination?
Ed Hein -- Juneau, Alaska
(Aversa's response begins after the break)
The determination of a recession — usually made well after the fact — can be thought of as an economic, political and historical yardstick. It is used to judge how policymakers — in the White House, at the Federal Reserve, on Capitol Hill and elsewhere — handled the economy and its problems on their watch. It also represents a lasting page in the country's economic history.
The end of a recession, meanwhile, signals the start of an economic recovery, which also can have implications for decisions made by policymakers, businesses, jobseekers and others.
Jeannine Aversa -- AP Economics Writer, Washington
But on April 5, Jeannine Aversa, AP Economics Writer, Washington, wrote this:
It's no longer a question of recession or not. Now it's how deep and how long.
Thus, two months before she wrote her "Ask AP" answer, Jeannine Aversa, AP Economics Writer, Washington, declared that the country was currently in a recession.
The April 5 recession determination by Jeannine Aversa, AP Economics Writer, Washington, was made not "well after the fact," but that day, even though at that point there was no published evidence of nationwide negative economic growth. There has been no subsequent published evidence of nationwide negative economic growth.
Thus, there's a pretty good chance that Jeannine Aversa, AP Economics Writer, Washington, was not only premature in her determination that the country was currently in a recession, but also was, and still is, incorrect.
Note that Jeannine Avera, AP Economics Writer, Washington, also informed her questioner that a recession determination "is used to judge how policymakers — in the White House, at the Federal Reserve, on Capitol Hill and elsewhere — handled the economy and its problems on their watch."
Does Jeannine Aversa, AP Economics Writer, Washington, believe she is entitled to prematurely "judge how policymakers — in the White House, at the Federal Reserve, on Capitol Hill and elsewhere — handled the economy and its problems on their watch"?
If so, who put Jeannine Aversa, AP Economics Writer, Washington in charge of making that judgment?
Cross-posted at BizzyBlog.com.
