Crawl Across the Ocean

Monday, November 03, 2008

Actually, No

This is just a follow-up to my post below, where I was noting how we like to make up stories about the economy to pretend we understand what is happening. Just after I posted that, I read this in the Globe, "In actual terms, it was the worst performance for auto makers since January, 1991, amid the recession caused by the first Gulf War."

The author Greg Keenan, just mentions in passing, as if it was commonly accepted, that the early 90's recession was caused by the Gulf War, as if if only there had been no Gulf War there would have been no recession.

Meanwhile Wikipedia suggests it was initially caused by the Savings and Loans crisis, and also posits that the recession lasted longer in Canada because of the threat of Quebec separatism.

Meanwhile, here you can see the start of an academic paper that presents a "reasonably comprehensive list of possible causes drawn from all schools of thought".

There are 8 in total, none of which refers to the Gulf War as a (direct) cause.

Or here is a paper from the Federal Reserve Bank in the U.S. which is honest enough to conclude by suggesting a point of inquiry for someone else to go figure out what happened because they're not entirely sure. Although it does helpfully note that the economy had been weakening well before the Gulf War started.

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