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Economy

Falling stock prices do not always presage a bad economy

Are falling stock prices in China a sign of deeper economic frictions? Is a drag on the real economy inevitable? As Nobel Prize laureate Paul Samuelson said, "The stock market has predicted nine out of the last five recessions." The economist was reminding us that observers who are guided by share price movements alone will be spooked about the state of the economy more often than warranted.

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