, Columnist
Look East to Find the Next U.S. Recession
Two years ago it looked as if China would slip up and take America with it. That risk hasn't gone away.
The gathering darkness.
Photographer: Dai YongyuanThis article is for subscribers only.
Despite some mild weakness in recent economic numbers, the U.S. economy doesn’t seem headed for trouble. The economic expansion, already eight years old, continues to chug along. Of course, when trouble comes, it tends to arrive suddenly -- no economic model is very good at forecasting recessions. What could cause a downturn in the next couple of years?
The biggest danger sign for a recession is probably a financial crisis. Many economists, and most of the general public, believe that the implosion of the financial system caused the Great Recession in 2008, and other protracted slumps -- Japan’s “lost decade” in the 1990s, the Great Depression -- were also preceded by big bank failures and/or asset market crashes.