Thursday, April 27, 2017

World economy: IMF is upbeat but don't bet on a smart recovery

The IMF sees the world economy emerging from its prolonged post-crisis slump in 2017 and 2018. It appears that expansionary monetary policy and fiscal policy (until it was reversed a couple of years ago) have borne fruit. Or it could just be that the world has been through the eight years or so takes to emerge from a serious financial crisis (Rogoff and Reinhart).

There are, however, too many imponderables in the picture- doubts about the fiscal expansion promised by Trump (given the difficulties he's had in dealing with Congress), Brexit and its likely fallout, China's debt overhang, rising protectionism and anti-globalisation sentiment and major geo-political risks, including all-out war in the Korean peninsula. So I wouldn't want to celebrate right away.

More in my article in the Hindu, The world is still flat.

1 comment:

Anonymous said...

Sir please let us know about your thoughts on - $1.3 trillion housing boom set to be India's next growth driver.

Evicting slums is not a joke. They need to be given financial independence and better opportunities and NOT cheap houses. Not sure if housing and job market would rise but surely there would be a social uprising in India.

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