Robert J. Barro has come up with an answer to the question What are Odds of U.S. Depression?
Barro, a Harvard economist, looks at data from stock market crashes in 34 countries, and projects a one-in-five chance that the current crisis will morph into a depression in the U.S., defined as a 10 percent decline in per-person consumption or GDP.
He eventually points out the obvious: the U.S. has an 80 percent chance of not having a depression (there have only been two since 1870, from 1917 to 1921 and then the Great Depression).
What do you think?
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