I found an old copy of ‘Into the Upwave’ by Robert Beckman at home (loving the author pic). It was published in 1988 but some of it is so relevant right now that they might as well save money on economists and read the first few chapters out loud on the Ten O’Clock News every night.
The gist of the first part of the book seems to be that everything is cyclical and looking at economic events over recent centuries it is possible to predict where we are in an economic long wave model. So ours would have several minor recessions over a 25-30 year ‘upwave’ period (1980/81 and 90/91 in the UK I’m guessing), followed by a period of sustained growth and then prices and/or inflation peak, leading to recession (now-ish). This recession is longer and steeper than anything that took place during the ‘upwave’, lasting 8-10 years.
The only thing is, what if the timeframe is longer and our relatively recent minor recessions were really the cumulative downwave to the post war upwave and therefore we are seeing the beginning of a period of full on depression as per the right hand side of the graph?
Update 27/01/2012 – a kind friend has just sent me a copy of The Downwave (I only had Into The Upwave before):
The copy on the back cover is spookily familiar: