Uncategorized | 11:35 am | August 28, 2010 | By Egidio DiBenedetto

Econ. prof Shiller says beware the ‘double dip’

If you thought the U.S. was out of the woods from the so-called Great Recession, think again, says Yale economics professor Robert Shiller.

Shiller, who teaches the perennially popular course “Financial Markets” in the spring, was featured in the Wall Street Journal’s video series “The Big Interview” on Friday saying the United States may be entering into the second phase of the recession, a so-called “double dip.”

“It’s something I’ve been warning about for some time,” Shiller told the Journal’s Simon Constable in the 20-minute interview, adding that the phenomenon is a rarity.

Shiller goes on to explain that the Federal Reserve is “out of ammunition” to prop up a nation facing low morale due to high unemployment rates and falling housing prices, among other economic factors.

The professor’s comments come on the heels of Fed chairman Ben Bernanke’s announcement that the central bank is willing and prepared to take “unconventional measures” to bolster growth.

Comments
  • Sooo???

    Prof. Shiller…just exactly what are we supposed to do about it?!? A. A. Milne’s character in the Winnie The Pooh series known as Eeyore reminds me of you.

  • Nope.

    There will be no “double-dip” because there was never a recovery. It’s been one prolonged recessionary period.

  • hiddenlevers

    People talk about unemployment, but the Obama administration isn’t doing anything about it. Bernanke doesn’t have the power to create jobs – bottom line. The Fed is ready to act, but the main problem is hiring. No jobs = no recovery. I looked at the chart of Unemployment against S&P500 over the long term. Unemployment has been increasing during the whole rally since early 2009. Tell me Mr. Bernanke, what can the Fed do to resolve the job situation? Nada. Here is that chart:

    http://www.hiddenlevers.com/hl/u?bN9tdf

    Double dip is pretty inevitable, and that 500k job loss print from last week is the nail in the coffin. Here is a visual showing what a double dip into recession would look like on an economic level:

    http://www.hiddenlevers.com/hl/u?9y7PrF