Hard Landing
Categories: Econ
Oh, the economy was flying along so high, so smoothly, so nicely. It was growing 3.2% a year (GDP) for 4 years. Growth even began to accelerate. It kissed 4.7% at one point. With tongue. All was...well.
But then...it wasn't.
"What goes up, must come down."
Or something like that. Elon Musk never said that, but mortals have. And that's what the economy is: mortal.
So when it stops growing at super fast rates, it "resets" or "corrects" to slower, more normalized and digestible rates.
When this resetting of economic growth means that GDP simply slows from, say, 3.5 percent one quarter to 3.2 percent to 2.7 percent to 2.3 percent and then just hangs out around 2 percent for a year and change...that's called a soft landing.
But in a hard landing, it just...stops. That is, growth goes from an up 3.6% in one period to a down 2 percent the next quarter, as if the wheels of the airplane had a hard touchdown when finally landing on firm runway, awaiting that next take off.