“Ten Questions for the Global Economy”, Economonitor, 25 Νοεμβρίου.
The fundamental structure of the world economy is changing. While the contribution of services to global output is on the rise, investment and productivity remain stagnant, savings keep accumulating, and growth and inflation decline. Meanwhile, globalization has increased co-dependence: a rising number of countries can influence the world’s economic performance and its financial stability. Yet, the international monetary system is neither fostering an efficient allocation of global capital nor preventing currency volatility. As a result, the global economy is in the middle of a “lost decade”: emerging markets (EMs) struggle with slowing growth, a sizeable external debt, capital outflows and depreciating currencies. Europe’s economies suffer from stagnating growth, separatist politics, a heavy sovereign debt, unfavourable demographics, inflexible labor markets, a migrant crisis and religious divides. Until 2020, the price of oil will stay in the US Dollars (USD) 50-60 range. As the shortcut to recovery is an ‘unfair’ mix of orderly debt restructuring and mild inflation, monetary policy normalization will take longer than expected, buoying the financial markets. As a result, the financial system is reaching an unstable equilibrium. The global economy is weak, the markets are strong, but the trade-off between sustained growth and financial stability is likely to continue. While high volatility will favour traders, for fundamental investors returns are likely to be lower than in recent years.
Σχετικές Αναρτήσεις
- Roubini, N. (2014) “The Single-Engine Global Economy“, Social Europe Journal, 04 Νοεμβρίου.
- Gros, D. & Alcidi, C. (2014) “The Global Economy in 2030: Trends and Strategies for Europe”, Economic Policy, CEPS Paperbacks, 02 Απριλίου.