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So it looks like it is going to be an L – not a V or a U. I mean an L-shaped recession, one that starts with a steep decline, followed by very low growth for many years. In a V-type recession, the recovery is instant. In a U-type, it comes eventually. My guess is that we are currently somewhere in the middle of the vertical bit of the L, but it is the horizontal bit that is the scariest. History never repeats itself exactly, but we know from economic history that financial crises are surprisingly similar.
FT.com: An L of a recession – reform is the way out Why letters? Have we really associated the hockey-stick shape so strongly with generic business progress that its shape can’t be meaningful reversed? That seems a lot more appropriate than the flat, bottom part of an L, even when you’re talking about glacial rates of progress.
