Prospects for the Global Economy in 2. Authors. A. Michael Spence, Distinguished Visiting Fellow, Council on Foreign Relations Robert Kahn, Steven A. Tananbaum Senior Fellow for International Economics, Council on Foreign Relations Ernesto Talvi, Nonresident Senior Fellow and Director, Brookings Global- CERES Economic and Social Policy in Latin America Initiative Yukon Huang, Senior Associate, Asia Program, Carnegie Endowment for International Peace Mark Zandi, Chief Economist, Moody's Analytics Interviewer(s). Mohammed Aly Sergie. December 1. 3, 2. Share. The International Monetary Fund expects the growth of the global economy will accelerate to 3. Five top economic experts offer insights on how to read trends in different regions. Developing economies will likely enjoy relatively high growth in 2. United States will continue with real growth and Europe's economy will expand very slowly, says CFR's A. Moody's chief economist Mark Zandi expects the United States to experience its fastest growth in a decade, driven by a reduction in fiscal austerity, a resurgent housing market, and the . Carnegie's Yukon Huang says China can reach a more sustainable growth path if it deals with its debt problem and boosts productivity. A. Michael Spence, Distinguished Visiting Fellow, Council on Foreign Relations. The 2. 01. 4 global economy is likely to see a reemergence of the post- crisis pattern of relatively high growth in the developing economies, a continuation of real growth in the United States, and very low growth in Europe. The U. S. Tail winds are coming from growth in the emerging markets (especially China), low- cost energy in shale gas, and extensive deleveraging in the household and financial sector. Fiscal drag from government persists, and the pattern of public- sector underinvestment will remain, diminishing longer- term growth potential. But growth will not follow easily. Most of the south of Europe has nominal unit labor costs well above Germany's post- reform levels, and the process of rec. Should the US Government do a second economic stimulus check? President Obama supports a $50B emergency stimulus package to send everyone $1000 checks.Welfare is the provision of a minimal level of well-being and social support for citizens without current means to support basic needs, sometimes referred to as public aid. In most developed countries, welfare is largely. Informational Articles. Each month Senior New Ways publishes a new article providing information and insights on topics relevant to boomers, seniors and/or caregivers. Be sure to check back every month for a new article! Senior Resources, Town of Colonie Senior Resources, aging, income tax assistance, legal assistancce, caregiver support, medical coverage, hiicap, medicaid, medicare, epic, social security, NYSTAR, NYWRAP, veteran exemption. Service Regional Senior Center. Major social activities include classes, trips, parties, and recreational activities. The center also serves a hot lunch daily, as part of the department's Golden Diners Program. Reforms to increase structural flexibility and accelerate a structural shift toward the tradable sectors have been limited. The net result is that structural rebalancing in Europe will take time and prospective growth will be low in and beyond 2. China has announced an aggressive and credible reform program, emerging from the Third Plenum in November. If it is followed by an equally aggressive program of implementation in 2. Recovery in the advanced countries will eventually restore some growth potential coming from the tradable sector, but probably not in 2. European market treading water. Other major emerging economies, especially those with current account deficits and a pattern of reliance on cheap foreign capital, experienced some instability during 2. Corrective action may slow them down into 2. China serving as a tail wind. African countries have been quietly impressive over a decade and through the advanced country crises. This seems set to continue in 2. Tananbaum Senior Fellow for International Economics, Council on Foreign Relations. European policymakers are buoyant. The urgent sense of crisis has receded, early signs of growth have appeared, and capital is beginning to return. But Europe is not out of the woods, and the risk that the crisis could return is higher than is commonly understood. Euro area growth is on track to reach 1 percent next year, following two years of decline. Continued bank deleveraging, an uncertain global growth outlook that will restrain exports, excessively tight macroeconomic policies, and an incomplete framework for monetary union provide powerful headwinds to recovery. Stronger demand is needed to boost growth, and a relaxation of fiscal austerity would be welcome in this regard. The European Central Bank (ECB) also will need to do more to spur new lending, particularly for small and medium enterprises in the periphery, and consider full- scale quantitative easing. The problem with this forecast is that growth at this level is insufficient to reduce high levels of unemployment, which have reached 2. Spain and 1. 2 percent for the euro area as a whole. Youth unemployment, which averages nearly 2. Europe's future. The ECB- led stress test, essential in efforts to restore confidence in Europe's banks, will need to navigate a narrow path forward: too soft and the credibility of the ECB could be irrevocably damaged; too tough and the resultant financial stress could turn today's green shoots brown in a hurry. Market pressures could return quickly if countries were seen to be abandoning their commitment to reform and financing gaps were to reemerge. Perhaps the more serious challenge to Europe in 2. Polls show that austerity is undermining the readiness of Europeans to accept the deeper union that is needed to redress Europe's economic woes. Parliamentary elections in May are likely to bring a strong antiausterity vote. European leaders need to win back their publics and make a better case for a faster move to economic and political union. Failure to do so could make 2. Ernesto Talvi, Nonresident Senior Fellow and Director, Brookings Global- CERES Economic and Social Policy in Latin America Initiative. Latin America, particularly countries such as Brazil and Argentina that are commodity- exporting and less dependent on the U. S. This period of exuberance was underpinned by sound macroeconomic policies, but largely propelled by cheap and abundant inflows of foreign capital and high commodity prices. High growth and active redistribution policies made possible by plentiful fiscal resources led to a 1. Latin America, a 5 percentage point decline in extreme poverty rates, and the emergence of an incipient middle class. Since mid- to late 2. Latin America's growth rates have cooled substantially as growth in important emerging economies lost steam (in particular, China's growth rate declined from previous skyrocketing levels of 1. More recently, international financial conditions have tightened—sending shivers through emerging markets—since the Federal Reserve announced the possibility of a gradual withdrawal of monetary stimulus. As a result, international financial and capital resources are expected to become scarcer and more expensive. Countries that are less well- managed economically, such as Argentina and Venezuela, are already in crisis mode. Policymakers in the well- managed countries of the region will have to face significant economic challenges stemming from a more adverse external environment and stricter financial constraints. These challenges, especially reigniting growth through domestic transformations, are politically complex and take time to produce effects (e. Mexico). Preserving macroeconomic stability and fiscal probity at a time when a dissatisfied electorate (with high expectations due to a decade of very high growth) will pressure governments to accommodate immediate popular demands at the expense of sound policies. How these tensions are resolved will be crucial in determining the economic prospects of the region in the coming years. For better or worse, in the next decade we will witness the emergence of a very different Latin America. Yukon Huang, Senior Associate, Asia Program, Carnegie Endowment for International Peace. The Third Plenum of the Chinese Communist Party's Central Committee laid out in November a bold policy framework for reaching a more sustainable growth path. These policy changes are essential as China approaches the level of income at which many other rapidly growing developing countries experienced precipitous growth slowdowns, the so- called middle- income trap. Going forward, if China hopes to evade this . Given China's high savings rate and huge level of reserves, this burden is manageable provided that the targeted economic growth rate can be sustained. Thus a major concern addressed in the Third Plenum was the strengthening of the fiscal system so that local authorities would no longer have to rely on bank credit to finance their basic expenditure needs. The two most promising areas of productivity- boosting reform are those that will facilitate a more efficient urbanization process, allowing the economy to benefit from the massive supply of labor still trapped in low- productivity rural activities or smaller cities and increasing the role of private firms, whose investment returns are twice as high as state- owned enterprises. While these macroeconomic problems are high on the policy agenda of senior leaders, the average citizen is more preoccupied with issues of social justice, corruption, and the environment. Thankfully, many of the actions highlighted at the Third Plenum also feed into the wider changes needed to address these politically sensitive concerns. Fiscal reforms and reduced dependence on banks will improve transparency and promote accountability. Rolling back the power of state enterprises and streamlining government procedures will restrain rent- seeking activities and expand opportunities for private firms. Better- managed urbanization will strengthen the voice of the middle class and improve the environment while also boosting productivity. Mark Zandi, Chief Economist, Moody's Analytics. Here's an intrepid forecast: In 2. U. S. Under current law—if Congress makes no substantive changes to taxes and spending—headwinds from fiscal policy will diminish rapidly. Lawmakers will again need to agree on keeping the government open and raising the Treasury debt limit, but they seem likely to do so after their earlier brinkmanship brought a negative political reaction. It would be wonderful if Congress and the Obama administration could undertake substantive entitlement and tax reform, but this seems unlikely, and it isn't necessary in the near term to allow the economy to improve; our long- run fiscal problems will come to a head in the next decade.
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