Yale University economist Stephen Roach said the United States has been lingering in a “balance sheet recession” as shoppers remain unwilling to really spend money and enable the economy to fully recover from the last financial crisis.

"We've been in a balance sheet recession, and we're still in it. That's the bottom line," Roach told CNBC.

"The big story in this recovery that's holding us back is the 1.5 percent consumption growth we've been on for seven years plus."

In a balance sheet recession, consumer spending is put on the backburner in favor of saving and paying down debt, CNBC explained. Economic statistician Julius Shiskin suggested several rules of thumb for defining a traditional economic recession, one of which was two consecutive quarters of GDP contraction.

"Consumers were battered by a levered asset bubble, sounds like China, and they have yet to fully recover," he said.

Roach, former chairman of Morgan Stanley Asia, said China will be able to withstand the stock-market plunge with its intervention tools.

"This is a classic unwinding of a levered asset bubble," Roach said. “It's been driven predominantly by relatively young and inexperienced, undereducated retail investors who boosted margin purchases of stocks by three fold in 12 months ending June 12th of this year.”

"The way that markets impact the economy is through what economists call the wealth effect, which hits consumers. The irony of China is the consumer sector is de minimis."

Back in the U.S., many economists expect a recession to begin soon. They say we're due because historically recessions have occurred every five to 10 years, and our last one ended in 2009.

But ace economist Edward Yardeni, president of Yardeni Research, says the next recession may not come until March 2019. That's based on the movement of the Index of Coincident Economic Indicators (CEI) over the past five business cycles, he explains in a commentary provided to Newsmax Finance.

"It has taken 68 months — from January 2008 through October 2013 — for the CEI to fully recover from its severe decline during 2008 and early 2009," he writes. The average time for a full recovery in the last five cycles was 26 months, with a range of 19-33 months.

"The good news is that the average increase in the CEI following each of those recovery periods through the next peak was 18.6 percent," with an average period of 65 months and a range of 30 to 104 months, Yardeni says.

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