I recently watched Ray Dalio's video on how the economy runs on short/long term debt cycles. However I was wondering how other major events impact economic growth:

How does the short and long term debt cycle interact with major political or news events that might affect the economy (e.g. trade wars, Enron)?

Does one supersede the other or perhaps even cause the other? Does the debt cycle only apply in a vacuum as one factor of many?

  • $\begingroup$ Dahlios theory is pretty meaningless. He doesn't say when debt overwhelmed income, so his conclusion can mean pretty much anything. And if his point is to extrapolate default rates to determine when the bubble will end, then it's just a hubbert curve. In reality resource depletion causes recession. $\endgroup$
    – D J Sims
    Sep 30 '19 at 18:38

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