2% of its residents (Link, 2005). .

             (Palley, 1999) Reported that given the dismal economic performance that marked the period from 1990 to 1995, when downsizing was widespread, inequality widened, and real wages fell, the subsequent U-turn in performance has been completely unexpected. Moreover, it has been cause for further surprise that the economy has continued to prosper despite the East Asian financial crisis, which destabilized global financial markets, undermined U.S. exports, and unleashed a surge in U.S. imports. .

             A second source of uncertainty (Palley, 1999) concerns the sustainability of the growth of personal consumption spending, which had been the principal engine of economic expansion in the past two years. In 1997, personal consumption expenditure contributed 59 percent of gross domestic product (GDP) growth, and in 1998 it contributed 85 percent. Meanwhile, in 1997 and 1998 nominal personal consumption expenditures grew 5.3 percent and 5.7 percent, respectively, while nominal disposable income grew only 4.7 percent and 4.0 percent. From the Federal Reserve's perspective, this pattern is not sustainable since consumption is growing faster than potential output, which implies that the economy will eventually hit an inflationary wall. An alternative interpretation is that such growth is not sustainable because households must inevitably run short of financial wherewithal, and when this happens, an economic decline will ensue. According to this view, recession rather than inflation is the danger. .

             A last scenario concerns the possibility of a full-scale crash or economic depression. Such an outcome is the least likely of the three scenarios, but it is still more likely than it used to be. In the 1960s and 1970s, the possibility of an economic depression was truly far removed. However, in the 1990s such a notion has surfaced as plausible, even if unlikely. Recent events in the global economy have added further credibility to this possibility.