Supply Shocks And Recession Risk: A Guide For Business Leaders

LeadershipLeadership StrategiesSupply Shocks And Recession Risk: A Guide For Business LeadersByBill Conerly,Senior Contributor.Forbes contributors publish independent expert analyses and insights. Bill Conerly connect the dots between the economy ... and business!Follow AuthorApr 28, 2026, 07:30am EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Frustrations of recessiongettyRecession is one of the best economics books I’ve read in a long time, and it’s accessible to the educated layman. It will help anyone understand the risk of a recession as well as the likely depth and duration of a downturn. It is light on policy guidance, aside from what to avoid. That’s much to its credit, as it does not come off as a political argument for more government or less.Prior to John Maynard Keynes’ The General Theory of Employment, Interest and Money (1936), economists generally expected recessions to be self-correcting, with relatively little discussion of causation. Those who did theorize on why we had recessions mentioned money and credit creation, overproduction, excessive debt and other possible triggers. Keynes emphasized swings in business capital spending, which were amplified by workers whose spending fell when they lost jobs. Milton Friedman brought to the fore the role of money supply changes as a cause of cycles. After the oil price hikes of 1973 and 1979, many economists discussed supply shocks, an approach that seemed to also fit the pandemic in 2020.Tyler Goodspeed, Recession’s author, is unusual in not focusing on one particular issue. He describes a market economy as generally resilient in the face of small shocks. But an unusually large shock, such as the pandemic of 2020, can cause a recession. More commonly, the unlucky coincidence of several small shocks occurring at once will trigger recessions. Some economies are more resilient—handling the shocks better—especially with regards to their...