{"id":43500,"date":"2019-02-04T06:41:17","date_gmt":"2019-02-04T11:41:17","guid":{"rendered":"https:\/\/olduvai.ca\/?p=43500"},"modified":"2019-02-04T06:41:18","modified_gmt":"2019-02-04T11:41:18","slug":"the-sorry-state-of-the-world-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=43500","title":{"rendered":"The Sorry State of the World Economy"},"content":{"rendered":"\n
\"shanghai<\/figure>\n\n\n\n

The Sorry State of the World Economy<\/a><\/h3>\n\n\n\n

Data released in January paint a bleak picture of advanced-economy prospects. Even if some emerging economies \u2013 which face serious challenges of their own \u2013 manage to pick up some of the slack, the world economy will remain encumbered by the combination of economic interconnectedness and political balkanization.<\/p>\n\n\n\n

NEW YORK \u2013 January is traditionally a time for assessing the developments of the previous year, in order to anticipate what the new one has in store. Unfortunately, even though we may be at a turning point for the better politically<\/em>, the data that have emerged in the last month do not paint a promising picture of the global economy\u2019s short-term prospects.<\/a><\/p>\n\n\n\n

The tone was set early in the month by the World Bank\u2019s Global Economic Prospects<\/a><\/em>, along with the accompanying articles. The report paints a picture as bleak as its subtitle \u2013 \u201cDarkening Skies\u201d \u2013 and cuts the growth forecast for the advanced economies in 2020 to 1.6% (down from 2.2% in 2018).<\/a><\/p>\n\n\n\n

Moreover, last week, the European Central Bank sounded the alarm<\/a> over the eurozone economy. Between the prospect of a disorderly Brexit and rising protectionism, exemplified by the trade war between the United States and China, Europe is subject to increasing uncertainty.<\/a><\/p>\n\n\n\n

Making matters worse, Germany is facing a growth slowdown. According to its own official data, the economy contracted<\/a> by 0.2% in the third quarter of 2018, while the Purchasing Managers Index for manufacturing sank<\/a> to 49.9 \u2013 a four-year low. Given Germany\u2019s role as the backbone of the eurozone economy, its economic struggles are likely to cascade beyond its borders.<\/a><\/p>\n\n\n\n

This is particularly problematic, because, after more than a decade of fighting crisis and recession, the advanced economies have depleted their ammunition for countering a slowdown. With the ECB\u2019s benchmark interest rate at zero, there is little room for a cut. <\/p>\n\n\n\n

\u00a0\u2026click on the above link to read the rest of the article\u2026<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Sorry State of the World Economy Data released in January paint a bleak picture of advanced-economy prospects. Even if some emerging economies \u2013 which face serious challenges of their own \u2013 manage to pick up some of the slack, the world economy will remain encumbered by the combination of economic interconnectedness and political balkanization. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,366,431,24292,534,8402],"class_list":["post-43500","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-global-economy","tag-interest-rates","tag-kaushik-basu","tag-monetary-policy","tag-project-syndicate"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43500"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43500\/revisions"}],"predecessor-version":[{"id":43501,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43500\/revisions\/43501"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}