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The global economy is not in crisis, but it is still vulnerable



NEW YORK – In the end of 2018 and the end of 2019 the turmoil of the turbulent repercussions in the financial markets has gradually relaxed.

That's good news. The bad news reveals the fear episode.

Throughout the world of 2018, the world economy seemed to be leaving the crisis over the last decade, after a great recession and a financial crisis. However, low sustainable growth, low inflation and low interest rates were not over.

The European Central Bank said on January 24 that "the pace of short-term growth could be weaker than expected" and the Bank of Japan decided to monitor the risks that its growth may have. In the United States, the Federal Reserve will meet in the next days, and then it may be that it decides to change the interest rate.

So, even though the world economy gave them great vitality last year, decades-old issues remain; Among these, the aging of workers in many of the most important economies, the productivity growth is very small, and the industrial capacity and global savings are excessive, as well as the scarce shortage throughout the world.

These factors predict a risky time: since growth rates are small, economic recession is simpler and, because of the low interest rates, the central banks would have less solid tools to reduce them. slowdown effects

"This shows that the forces that have reduced many economies are much more difficult to predict or spread more people than they think," said Roberto Perlik, a member of the Cornerstone Macro Financial Research Group. "The bad news is that in many countries there have been widespread wage solutions and inequality in the workforce for many years."

As the growth rate is low, the economy is a bit easier to reverse.

Keep in mind that the markets collapsed in the last weeks of 2018, largely because the US Federal Reserve could raise interest rates because it could increase the proportion of the economy (for example, a higher rate of interest, people consume less and have less credit management).

What does the interest rate of 2.4% mean, the level maintained after the rise of the US rate in the US is collapsing in the economy?

Based on the world economy, it is also encouraged to increase growth, there is little change in the way changes are made. In the case of the United States, for example, there is a greater vulnerability to the recession due to many factors, such as the closure of the Public Administration (which ended on January 25 and lasted for more than a month) or a trade war such as China.

Adam Posen, president of the Peterson Institute for International Economics, said "growth and investment appear to be terribly dirty in fiscal and monetary policy, especially in the United States, when there is no rigor."

"The situation could be much worse if the policy becomes unlimited, without such need," he added. "In any case, it is worrying that the macroeconomic economy in the world should not be backed" for the promotion of low interest rates and deficits.

There is a risk of generating the negative cycle of the report: the growth of the last decade, due to the stability of income, can affect political issues in countries such as the United Kingdom, Italy and the United States. These problems, at the same time, can lead to new risks of a bad economic event in Washington's last event.

The world economy has no crisis; Growth is lower than growth or contraction.

However, in the last few months the lesson is clear that the forces that retract globally multilingualism are not temporary: they have not disappeared. As a result, the world is particularly vulnerable to bad luck or bad politics.

So, the small global growth was not the only phase; It is a new reality that we should take before debate and macroeconomics in the near future.


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