Economicate - The Economics Forum

The world economy is showing some positive signs. Asia's emerging economies have lept forward (with over 10% annual growth in some), and some developed economies also returned to growth (Japan, Germany, and France). The USA is showing signs of stabilizing house prices, and the rates of job losses are reducing.

It feels like time to discuss the possible rates and types of recovery we may see for different regions coming out of this recession.

Widely discussed possibilities are:

• A 'V-shaped' recovery
  This is a strong recovery, as pent up demand is unleashed and output rapidly improves. This shape has a case as it has been witnessed in the aftermath of many major recessions.
  
  
• A 'U-shaped' recovery
  This is weaker than a V-shaped recovery, with a flat bottom of slow growth. The Economist sees this as the most likely prospect for the global economy, citing weak consumer spending as households pay back debt, a need for domestic demand to "pick up the baton" from government stimulus in most developed nations, and a need for reform to strengthen consumption in China.
  
  
• A 'W-shaped' recovery
  Where growth returns for a few quarters before another deterioration.
  

What would you put your money on?