Financial markets do not understand the fierce determination of governments and central banks to avoid a recession

Many investors are convinced that there is going to be a recession in the United States and the euro zone after a long expansion period. This explains the jitters and weakness of equity markets. But investors need to understand that governments and central banks, which witness ed the damage caused by the 2009 recession, are now fiercely determined to avoid a recession. If the US and euro-zone economies weakened: Interest rates would be cut and quantitative easing would resume; Fiscal deficits would increase, w hich suggests that even if growth did slow, it would not become much lower than potential growth, because there would be support for demand and for the solvency of all economic agents.