Commentary I remember that in 2009, three phrases were constantly repeated: “In this crisis measures are different, because governments are investing in the recovery by increasing public spending,” “the funds from the stimulus will strengthen the recovery,” and “central banks help a stronger recovery by lowering rates and increasing liquidity.” Then, 2010 arrived and the eurozone entered a deeper crisis. In many respects, this recession is similar. Many governments are doing the same as in 2009: extend and pretend. Extend structural imbalances and pretend this time will be different. It’s worrying to see the same level of excessive optimism of 2009 these days, and we must prepare for a complex environment and a difficult recovery if we are to emerge from this crisis stronger. A recent analysis by Ned Davis Research shows that as government debt rises, growth slows, and jobs recovery is weaker. Using a multi-factor mode analysis with …
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