The Shape of the US Recession: V or U or W or L-Shaped?

Project Syndicate has now published my latest column “The Shape of the US Recession”. This is a shortened version of my April 7th blog “The US Recession: V or U or W or L-Shaped? where I first discussed whether the current US recession would be a short and shallow one (V-shaped), a more severe and protracted one (U-shaped), a Japan-style longer term stagnation (L-shaped) or a double-dip recession (W-shaped) if the coming tax rebate leads to a temporary pick-up in consumption in Q3.

As I have been repeating for months now the US debate is not anymore on whether we are going to have a soft landing (slow growth patch) or a hard landing (a recession) but rather on how hard the hard landing will be (i.e. how deep and severe the recession will be).

Today the Financial Times has a long and very good article titled “Road to Ruin? America Ponders the Depth of Its Downturn” that starts as follows:

What will be the shape of the US economic downturn? In recent months, the debate among economists has shifted from whether the US will have a recession to how deep and how long it will be.

Will it be a V-shaped recession – short, shallow and followed by a rapid return to normal rates of growth? Will it be U-shaped, in which the initial downturn is followed by a protracted period of weak growth and a slow return to the trend rate? Or could it even be an L-shaped recession – with economic weakness lasting for many years, as in the US during the Great Depression or Japan in the 1990s?

The article then goes on discussing whether the US recession will be V-shaped or U-shaped or L-shaped. As they say “imitation is the sincerest form of flattery"...

And here is below my “The Shape of the US Recession” column…