"US Calls It a Recession? Just a Funny Matter"…Nobel Laureate Professor Thaler's Insight

'Nudge' Author Richard Thaler
"Low Unemployment and Strong Labor Market... Indicates US Economy is Strong"
"Inflation Due to Ukraine War and China's Supply Chain"

Professor Richard Thaler of the University of Chicago, author of the bestseller "Nudge," denied the possibility of a recession in the United States.
[Image source=Yonhap News]

[Asia Economy Reporter Yoon Seul-gi] Richard Thaler, a 2017 Nobel Prize winner in Economics and author of the bestseller "Nudge," denied the possibility of a recession in the United States.

Recently, in an interview with CNBC, Professor Thaler stated, "I have not seen anything resembling a recession," emphasizing that "historically low unemployment rates and historically high employment levels in the U.S. indicate a strong economy."

He pointed out, "The economy is growing, just slightly slower than inflation," adding, "Describing a slight decline in real Gross Domestic Product (GDP) as a recession is simply ridiculous."

Regarding the worst inflation, with the U.S. consumer price index rising 8.5% in July, he explained, "Some of the price increases we observe are directly caused by the Ukraine war and supply chain issues in China," and noted, "If either or both of these ease, prices could fall somewhat."

The U.S. GDP shrank by 1.6% in the first quarter and 0.9% in the second quarter, marking two consecutive quarters of negative growth. Generally, when GDP contracts for two consecutive quarters, the market considers it a recession. However, the official announcement from the National Bureau of Economic Research (NBER), which determines recessions, has not yet been made.

In this regard, Professor Thaler said, "Since the U.S. labor market still shows resilience, declaring a recession just because GDP has contracted is illogical," and added, "There are no signs related to a recession appearing in the U.S. economy."

Meanwhile, "nudge" means "to poke gently with an elbow," and Professor Thaler redefined it as a soft intervention that guides others' choices. Thaler's book "Nudge" became a must-read for heads of governments worldwide after the global financial crisis in the late 2000s. In particular, former U.S. President Barack Obama incorporated nudge theory into various public policies.

This content was produced with the assistance of AI translation services.