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I've long felt like doom & gloom is somewhat key to a strong economy. By tempering that "irrational exuberance" that leads to the development of bubbles that e

I've long felt like doom & gloom is somewhat key to a strong economy. By tempering that "irrational exuberance" that leads to the development of bubbles that eventually cause recessions. To answer your question: yes, in the USA at least, consumer confidence in the economy was low through the early to mid 90s. The country had a recession in the early 90s with oil prices rising and real estate prices remained quite low throughout much of the decade. The Consumer Confidence Index throughout the 90s maps almost exactly to the CCI from 2008-2020. With lows of about 60 in 1990 & 2009 to peaks of about 140 in 1998 and 2018. Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either.

eru 3y ago
Bubbles don't cause recessions. However I agree that doom and gloom isn't necessarily bad. And I would also say that short sellers perform one of the most vital functions in finance. (And that's why we should encourage their activity, instead of curtailing them with ever more rules or casting them as the bad guys.) > Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either. Depending on where you were in Europe at the time, you would have had much bigger fish to fry: the end of the Cold War and dissolution of the Communist Block. You would have to look at individual countries to judge the impact (eg just a quick look at real GDP per capita reveals vast differences between eg Germany, Poland and Russia during the 90s. (I grew up in (East) Germany and was aware that Russia did really badly in the 1990s. So I was a bit surprised to see that Poland's GDP per capita was on an upward trajectory almost immediately. I naively assumed they also had a painfully long and protracted transition phase. But it looks like their 'shock therapy' might have worked.) See https://en.wikipedia.org/wiki/Balcerowicz_Plan https://en.wikipedia.org/wiki/Balcerowicz_Plan

eru 3y ago

Bubbles don't cause recessions. However I agree that doom and gloom isn't necessarily bad. And I would also say that short sellers perform one of the most vital functions in finance. (And that's why we should encourage their activity, instead of curtailing them with ever more rules or casting them as the bad guys.) > Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either. Depending on where you were in Europe at the time, you would have had much bigger fish to fry: the end of the Cold War and dissolution of the Communist Block. You would have to look at individual countries to judge the impact (eg just a quick look at real GDP per capita reveals vast differences between eg Germany, Poland and Russia during the 90s. (I grew up in (East) Germany and was aware that Russia did really badly in the 1990s. So I was a bit surprised to see that Poland's GDP per capita was on an upward trajectory almost immediately. I naively assumed they also had a painfully long and protracted transition phase. But it looks like their 'shock therapy' might have worked.) See https://en.wikipedia.org/wiki/Balcerowicz_Plan https://en.wikipedia.org/wiki/Balcerowicz_Plan