has another interesting post today
(“Don’t mention the economy”). It got me thinking about how careful many are “not talking the economy into a recession”.
I had a look at the debate surrounding the UK economy.
Figure 1 (below) shows how frequent a number of issues appear in the debate on the UK Economy. (Normally referred to as the ‘Share-of-Buzz’).
Notice the increased focus on the “recession” from October to January, followed by a very small drop.
At the same time, the focus on “slowdown” is mostly constant.
Because the Share-of-Buzz is unadjusted for influence (all voices count the same) the picture closely mirrors the debate among ‘the general public’.
Now, notice Figure 2 (below). It shows the Share-of-Influence of the same issues. Because this metric is adjusted for influence it a closer depiction of the debate among the top influencers including the influential media.
Notice how the decline in the debate on “Recession” is followed by a corresponding increase in the use of “Slowdown”.
It’s almost like some omnipresent voice said “Don’t mention the ‘R-word’ – the safer word is ‘slowdown’”.
I am sceptical to what extent you can avoid a recession by not talking about it. You may be able to postpone it a short while, but if your economy is not sustainable, you will be hit sooner or later. The market forces will (thankfully) always catch up.
It may be telling that the “optimism” element has all but disappeared from the influence adjusted debate on the UK Economy.