Tyler Goodspeed says recessions are random shocks, not cycles
Updated
Updated · Fortune · May 9
Tyler Goodspeed says recessions are random shocks, not cycles
11 articles · Updated · Fortune · May 9
Drawing on 400 years of data in a new book, the ExxonMobil chief economist cites war and energy disruptions, from Atlantic piracy to 2008 oil prices, as major triggers.
He argues statistical tests found no reliable link between the length or strength of expansions and the timing or severity of subsequent downturns, challenging long-standing business-cycle theories.
Goodspeed also rejects the idea recessions are economically cleansing, saying they mainly damage younger firms and workers, and urges policymakers to avoid contractionary responses that worsen shocks.
Can the clean energy transition finally 'shock-proof' our economy against future recessions?
If recessions are random accidents, why do some economic indicators successfully predict them?
Was the 2008 financial crisis really caused by an oil spike, not Wall Street?
The Real Reasons Economies Shrink: Tyler Goodspeed’s Evidence That Recessions Are Caused by Unpredictable Shocks
Overview
This report explores Tyler Goodspeed’s new book, which challenges traditional views on recessions by arguing they are caused by random, unpredictable shocks—like wars or energy price spikes—rather than predictable cycles or internal economic mistakes. Drawing on his experience as a leading economist and former chair of the White House Council of Economic Advisers, Goodspeed uses centuries of data to show that economic expansions do not become more fragile with age. The report highlights how this perspective changes the way policymakers, businesses, and individuals should prepare for downturns, focusing on resilience and adaptability instead of trying to predict or prevent recessions.