Even as the stock market plunges, interest rates rise and a trade war with China looms, the economy won’t be “going off a cliff” this year—but growth may slow to a crawl.
That is the forecast from leading economists at the University of Chicago Booth School of Business speaking at sold-out Economic Outlook 2019 events in New York and Chicago in January.
Economic Outlook, established in 1954, is in one of the school’s most venerable traditions. Chicago Booth is renowned for faculty whose field-defining insights and analyses reshape the face of business, markets and the global economy. At the annual event, the strong perspectives of Booth economists provide alumni, business leaders and policymakers with the unique insights to evaluate trends and shape their understanding of the world to come.
This year, four Chicago Booth scholars gathered to discuss the question, “Trade Wars, Deficits and Inflation: Rhetoric or Reality?”
The first event took place on Jan. 10 in New York featuring Randall S. Kroszner, the Norman R. Bobins Professor of Economics and a former Federal Reserve governor; and Erik Hurst, the Duane Roth Professor of Economics, whose work focuses on labor markets. The second event was held in downtown Chicago on Jan. 17 featuring Kroszner; Austan Goolsbee, the Robert P. Gwinn Professor of Economics and former top economic adviser to President Obama, and Raghuram Rajan, the Katherine Dusak Miller Distinguished Professor of Finance and a former governor of the Reserve Bank of India.
Here are their insights for the year ahead:
Where is the economy headed in 2019?
“It’s hard to see the economy going off the cliff. Obviously, there are a lot of clouds on the horizon—whether it’s trade war issues, fiscal deficits or the broader dysfunction in Washington. But I think the fundamentals for the U.S. right now are looking reasonably good.” —Randall S. Kroszner
“What we’re thinking about is how much is a slowdown going to look like when it happens, and what is the probability of that happening? I get the feeling we are similar to where we were in 1999 or 2000. Just like in 2000, we had a recession, but it was a very mild recession.” —Erik Hurst
“I still don’t think we’re out of the muck yet, and there are definitely risks of recession to be worried about.” —Austan Goolsbee