22 February 2009
Prime Minister John Key's jobs summit will be warned unemployment could rise to 11.2 percent over the next two years - a rate that exceeds the most pessimistic forecasts and is higher than the number of jobless in the last significant recession in the early 1990s.
The warning comes from the New Zealand Institute in documents prepared for the summit, and is based on new research published in the United States last month on recessions originating in financial crises.
Institute research director Benedikte Jensen said work done by eminent US economist Kenneth Rogoff showed such recessions were prolonged and associated with "profound" declines in output and employment.
On average, real house prices declined 35%, with the decline stretching over six years. Equity market downturns lasted for at least three-and-a-half years and unemployment rose, on average, by seven percentage points.
The warning comes from the New Zealand Institute in documents prepared for the summit, and is based on new research published in the United States last month on recessions originating in financial crises.
Institute research director Benedikte Jensen said work done by eminent US economist Kenneth Rogoff showed such recessions were prolonged and associated with "profound" declines in output and employment.
On average, real house prices declined 35%, with the decline stretching over six years. Equity market downturns lasted for at least three-and-a-half years and unemployment rose, on average, by seven percentage points.
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