"Joe Stiglitz looks into his crystal ball. You probably won't like what he sees:
What Lies Ahead in 2011?, by Joseph E. Stiglitz, Commentary, Project Syndicate: ... The ... most important downside risk facing the global economy ... comes from the wave of austerity sweeping the world,... particularly in Europe... The outcome of premature fiscal consolidation is all but foretold: growth will slow, tax revenues will diminish, and the reduction in deficits will be disappointing. ...
With the US able to borrow at record-low interest rates, and with the promise of high returns on public investments after a decade of neglect, it is clear what it should do. A large-scale public-investment program would stimulate employment in the short term, and growth in the long term, leading in the end to a lower national debt. But financial markets demonstrated their shortsightedness in the years preceding the crisis, and are doing so once again, by applying pressure for spending cuts, even if that implies reducing badly needed public investments.
Moreover, political gridlock will ensure that little is done... To me, attempting to discern the economic prospects for 2011 is not a particularly interesting question: the answer is bleak, with little upside potential and a lot of downside risk. More importantly, how long will it take Europe and America to recover, and can Asia’s seemingly export-dependent economies continue to grow if their historical markets languish?..."
at http://economistsview.typepad.com/economistsview/2010/12/stiglitz-what-lies-ahead-in-2011.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29
No comments:
Post a Comment