Dickson Igwe. Photo: VINO/File

Ultimately, the Green Shoots are the result of human behavior. Human behavior is the key driving force in economics. It is the core factor in economics, and how scarce resources are best utilised. Human society is the laboratory of the economist.

Now, the term, "green shoots of recovery" is popular with politicians. It speaks of an incumbent government that is on the right track at the end of a period of slow or contracting economic growth. Green shoots are the evidence that the government’s economic philosophy has been right.  

In a world where inflation no longer poses a threat, slow economic growth and the fear of deflation have become the new economic bogeymen. Economists in 2015 view consumer demand as the key driver of an economy.

Consequently, generating economic growth means getting Jack the Consumer to go out and spend. Governments put money into Jack’s pockets through policies designed to stimulate the economy. When economic stimulus is successful, demand increases, and then green shoots begin to appear.

Green shoots, even when brought about by government stimulus, are a reason for optimism by Jack Consumer. Green shoots are specific economic indicators. The green shoots are the signposts pointing towards economic recovery: a better tomorrow.

When the "green shoots" begin to show, it means that things are getting better economically. And these shoots, popping out the soil, are mainly to the benefit of an incumbent: the government in power.

Sometimes, however, the green shoots may appear too late to help an incumbent at a general election, and save a government from the rage of a frustrated and longsuffering voter. The green shoots may fail to appear completely. That is especially so in a deflationary economy or during a long recession.

OK. These "green shoots" are pointers, especially when they occur together: indicators such as increased home building; rising demand for commercial space; rising imports and exports; increasing hotel occupancy rates; busy restaurants; tour busses filled with guests; increasing sales in stores; rising public and private sector revenues; quicker stock turns; increased hiring by businesses; increased job vacancies in all sectors; a fall in unemployment; rising wages, rising profits; increased consumer confidence; and increased business confidence.

There is a widespread feeling of optimism: products have a short shelf life. Jack the Cautious Consumer has become Jack the Spender. Suddenly the sun shines bright and glorious. The full moon looks more majestic. There is a new buzz in town. Stores are busy selling to customers, there is a beehive of commercial activity in the country, "life is beginning to look good."

When these economic indicators begin to appear, even in "embryo," in a community suffering a long recession or stagnant economy, "look up, economic redemption may be on the horizon."

The green shoots have a global feature. Many a time the shoots first appear in a major hub economy. Then there is a chain effect. They begin to appear in country after country. This is especially so with countries that are linked geopolitically, and that share similar economic and social demographics.

Consumer and business confidence is determined by the scientific sampling of a representative section of the population of consumers and producers. When there is increasing consumer and business confidence that is a sign of economic recovery.

Responses to the question: "how do you feel about the economy?" are mostly in the positive area of the questionnaire. Statements, such as, "my business is doing well, I feel secure in my job, I can take that 2 week holiday without undue pressure, I am no longer concerned about not being able to make the mortgage and car payments," and so on and so forth. These are the most common responses.

However, these green shoots of economic growth will remain dry seeds in an unfertile soil, until Jack and Jill the consumer start to feel good about their small business, job, and social prospects. Then the pair goes out and buys the new car, and takes the family on that well deserved cruise. Jill puts an extra hundred dollars into her weekly grocery cart, and buys those two I PADS for the two kids to help with their schoolwork. The couple may even extend the home.

Increased spending by Jack and Jill is the herald that the economy has turned the corner. That spending is a type of fertilizer. It is during a period of rising demand that the green shoots of economic recovery are most likely to appear. There is an increase in retail activity, and the amount and circulation of cash in the economy.

Increased spending by the consumer is a good sign, especially when there is an increase in commercial activity at the grass roots: spending by the poor and middle class.

Struggling Man begins to see a route into the middle class. The middle class feels secure and starts to expand. And a number of those in the middle class begin to see an opportunity to join the wealthy 1%.

These are sure signs that the economy is growing once again.

But most critically, the appearance of green shoots is the last chance by an incumbent government to secure a second term in office, after a long period of economic stagnation.

To be continued

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