Christopher Dow On Major Recessions

The National Institute had planned a seminar to mark the launch of Christopher Dow's new book Major Recessions. The seminar had to be cancelled, because Christopher Dow died a few days before it was due to be held. As some kind of substitute, the CLARE Group decided to publish this review article. The sections of the article have different authors, but they have been designed to be complementary in scope and the authors have discussed them with each other and with other members of the Group, especially A.J.C. Britton, W.J. Carlin, C.A.E. Goodhart, P.M. Oppenheimer, M.V. Posner and J.R. Sargent. The Review is pleased to give hospitality to CLARE Group articles, but is not necessarily in agreement with the views expressed. Robin Matthews starts with some comments on the style in which, and background from which, Dow wrote this work and which concentrates on five major British recessions of the 20th century. He presents five of Dow's more general conclu sions with comments. This section is followed by a review by Mike Artis of Dow's analysis of the five major recessions (1920-1, 1929-33, 1973-5, 1979-82 and 1989-92) regarded as episodes in economic history. One of Dow's main theses is that major recessions permanently reduce productive capacity. Martin Weale examines statistically his suggestion that they reduce demand by consumers whose income expectations adjust in that way - for which he finds little support. John Flemming addresses the 25 'golden' postwar years without a major recession presenting a critical analysis of Dow's method of distinguishing between major and minor recessions. Matthews and Flemming consider his treatment of the question whether major recessions are inevitable, how they might be avoided, and how their effects might be mitigated. While hankering for postwar controls Dow's Keynesianism is subtle. Finally Matthews suggests an analogy with Schumpeter's Business Cycles which survived a critical review by Kuznets, Dow's treatment of his data being much more thoughtful than Schumpeter's even if some parts of his model seem rather shaky.