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The Nowotny-shaped recovery
By Petra Spescha
European economists have been nearly unanimous about what Europe’s recovery from the crisis will look like on a chart: L-shaped — a severe slump with a prolonged period of flat or minimal improvements in the economy.
But at the Reuters Central European Investment Summit Ewald Nowotny created a new shape when he tried to clarify a statement he made to an Austrian newspaper earlier this month about the economic turnaround.
“It was not a real L-shape –it was an L which was a bit upward bending,” Nowotny, who is on the European Central Bank’s Governing Council, said.
So it appears Nowotny, an economics professor, takes a less pessimistic view of the recovery than we previously thought. Not quite a rebounding ‘V’ shape or a steady ‘U’-shaped rise but somewhere in-between those shapes and the downbeat ‘L.’
Nowotny said last month there was unlikely to be a ‘W-shaped’ recession if exit strategies are timed well. He talked more about exit strategies, rates and the economic outlook here.
Ewald Nowotny gestures during the Reuters Central European Investment Summit, September 28, 2009. REUTERS/Leonhard Foeger