For Immediate Release
April 10, 2000

Contact: Alisa Giardinelli
610.690.5717
[email protected]
http://www.swarthmore.edu/Home/News

When Recession Comes, Nation Will Recover Quickly, Swarthmore Economist Says

A Swarthmore economist invited to President Clinton's conference on the new economy last week has good and bad news. The bad news, according to Philip Jefferson, is that sooner or later the economy will experience a recession. The good news is that the recovery will be less painful than that of past recessions because of permanent gains achieved during the current record-long expansion.

According to Jefferson, the only representative of a liberal arts college at the conference, risks to the macroeconomy include a collapse of the stock market, rampant inflation, a labor shortage, and a rise in interest rates by the Federal Reserve Board.

"It's nice that these risks are not new ones," Jefferson says. "These types of 'shocks' have hit the economy before. The real question is what would be the timing for these events. It's not a question of if, but when."

When the economy does nosedive, Jefferson says the nation is well-equipped for a speedy recovery due to an increasingly versatile and flexible workforce. "The experience of working acclimates new workers to the process of acquiring skills, meeting deadlines, staying on schedule, and learning," he says. "These skills, along with the experience of having had a job in the recent past, will empower workers who might temporarily lose a job in the next recession. Workers' willingness and ability to retrain and possibly move to areas where jobs are more plentiful can potentially facilitate a faster recovery from a recession."

Jefferson, a former research economist at the Federal Reserve, studies the relationship between unemployment and small firms' financial constraints, government taxation via inflation, and the effect of the money supply on macroeconomic performance. An active researcher, he has published research in the Journal of Economics and Business, Economics Letters, and Economic Inquiry.

Located near Philadelphia, Swarthmore is a highly selective liberal arts college with an enrollment of 1,400. Swarthmore is ranked the number one liberal arts college in the country by U.S. News & World Report.

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