The Rocky Balboa recovery

Well most people must have read this superbly titled piece. Those who have not should.

This is just an amazing way to talk about recovery in US markets. Despite some serious knocks, recovery keeps coming back like  Rocky Balboa:

Every Sylvester Stallone fan knows that Rocky Balboa never gives up, or rather: “it ain’t about how hard ya hit. It’s about how hard you can get it and keep moving forward.” (Stallone 2006). However many times Rocky gets hit, he keeps on coming. Even after Apollo Creed floors him with a vicious hammer punch, Rocky jumps up for more punishment.

So too with the current US economic recovery: on track in the spring, knocked down in the summer. Payroll employment rose strongly in the spring of 2010, then fell back in the summer. Many thought the slump had ended in the spring of 2011, only to be disappointed in the summer. Then again this summer, after encouraging unemployment and growth figures in early 2012, the recovery was knocked back. Like Rocky, the US economy displays an impressive resilience. But also like Rocky, it continues to get whacked (for more on the US recovery see Giannone et al. 2012).

The obvious question is why the recurrent loss of momentum in the US economic recovery?

The answer to the q is rise is policy uncertainty. The authors take us to their new project – The graphs shows recovery falters each time policy uncertainty rises. This time the issue is rising uncertainty over Eurozone..

The same approach could perhaps be used for India as well. I would guess it would show rise in policy uncertainty over the last few months. This could be used to prove a point to our political bosses that all is not well..

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