The Economist: Recessions have become ultra-rare

Aside from a contraction stemming from covid-19 lockdowns, the world economy has not suffered a synchronised recession for over 15 years

Myopia, also known as near-sightedness and short-sightedness,  

distant objects appear blurry, while close objects appear normal.

To many observers, contemporary capitalism has grown flabby, as can be seen in the armies of consultants, social-media influencers and crypto-traders who produce little, if anything, of lasting value. 

At the first hint of trouble rich-world governments open their wallets, leading to a political settlement we have called “bail-outs for everyone”. 

During the energy shock of 2022, European governments allocated support worth 3% of GDP to help firms and households. 

After the collapse of Silicon Valley Bank in 2023, Uncle Sam stepped in to guarantee deposits. 

Politicians are quick to offer support to “strategically important” firms in trouble. And after they intervene, they are slow to pull back. 

Today, amid a solid economy, fiscal deficits are still huge. America’s exceeds 5% of GDP.

Fiscal policy may have stopped demand from collapsing. But the intervention has been so large that politicians are distorting the economy’s allocation of resources.

First, the financial risk. Long stretches without downturns foster “disaster myopia”, a tendency for people to forget that bad stuff can happen. They load up on risky assets—just the sort that struggle in times of trouble.

Households across the rich world appear oblivious to the fact that the line does not always go up. In recent years they have allocated $3trn of their savings to global equity markets, by far the biggest inflow on record. 

With 30% of American households’ assets now exposed to the stockmarket, an all-time high, a proper correction would cause serious pain.

The world economy has avoided a prolonged downturn for an impressively long stretch. Yet the very success of stabilisation policy creates vulnerabilities.

At best, the result is a drift into stasis.

Copilot: I dessa sammanhang kan stasis relatera till:

Ekonomi/teknik: ett tillstånd där marknaden eller innovationer står stilla, t.ex.  en bubbla som inte spricker.

Historia/filosofi: stasis som en metafor för kulturell eller ideologisk stagnation.

At worst, it is the accumulation of enormous fiscal and financial risks. 

The Economist 10 November 2025

https://www.economist.com/finance-and-economics/2025/11/10/recessions-have-become-ultra-rare-that-is-storing-up-trouble

Many of the ingredients seem to be there for another Minsky moment, named after the US economist Hyman Minsky – the point where markets and economies, overwhelmed by debt, suddenly collapse.

Minsky’s abiding economic insight is the idea that stability in financial markets breeds instability. The longer things remain settled and predictable, the more oblivious to risk financial markets become, until eventually the whole edifice comes tumbling down.

https://englundmacro.blogspot.com/2024/04/time-for-minsky-moment.html