The possibility of self-fulfilling expectations

An objective, quantitative analysis would dismiss the idea that OECD countries are going to enter into recession: The tariffs imposed by Donald Trump are too small to explain a significant slowdown in global trade; Low interest rates ought to prevent a loss of solvency among indebted economic agents and therefore a recession, as recessions are always triggered by an insolvency crisis. But this analysis is probably too rational: If many households and companies think that the tariffs (the trade war) are going to lead to a recession, then the ensuing rise in savings and fall in investment will actually trigger a recession; If many economic agents overlook the new economic mechanisms and expect a recession, then one will occur even if everyone remains solvent. The possibility of self-fulfilling expectations must always be kept in mind.