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> In the end, it's a closed system. There is no true justification for a recession. It should balance out. Not sure I follow your argument. You seem to imply t

• aatd86 4y ago
  Not implying that. Implying that the strategies to smoothen things out are not applied correctly but too naively obviously (there are multiple correlated factors so I guess it's somewhat more difficult than it seems). They address symptoms and not the root causes. Basically, a recession occurs when money has been pulled back from the economy, whether by a Central Bank that would hike interest rates or, in a more adhoc fashion, by a given sector being hyped (via a technological breakthrough perhaps) or even a single commodity (people had weird fetishes around tulips at some point). These are not cash-flow generating assets nor ventures or they create too few new jobs in the immediate term. Now since money does not flow back instantly (some kind of hysteresis)... A recession. A multi-participant tug of war...