Financial Times: Why World Economy Feels Fragile

The livelihoods and routines of more than 7 billion people depend on a stable global economy, and there are always reasons to worry, including long-term structural and cyclical challenges, explains Martin Wolf for the Financial Times. Global growth has slowed, led by a slowdown in the Chinese economy, but central banks and global markets can and do adjust to cyclical changes. While severe worldwide recessions are rare, the markets should heed long-term structural changes and trends regarding productivity, debt, inequality and automation that fuel populism and pessimism. “The biggest negative risk is that it would be impossible to mount a co-ordinated and effective response to a severe global economic slowdown,” Wolf writes. “One obvious positive danger comes from the possible unmanageability of the past accumulations of private and public debt. Another danger is that a breakdown in the global political order creates severe economic disruption on its own, perhaps through a collapse in trade, perhaps as a result of another geopolitical event.” Central banks hold limited tools for responding to a severe or prolonged crisis. Political instability only heightens the sense of crisis. – YaleGlobal

Financial Times: Why World Economy Feels Fragile

Populists stoke fears about the global economy and trade, instigating political instability, pessimism and self-fulfilling prophecies of economic crisis
Martin Wolf
Wednesday, January 9, 2019

Read the article from the Financial Times about risks for the global economy.

Martin Wolf is chief economics commentator at the Financial Times, London. He was awarded the Commander of the British Empire honor in 2000 for his contributions to financial journalism.

Copyright The Financial Times Limited 2019. All rights reserved.


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