In an article from wsj, a global economic slowdown perpetuating from struggling economies in Germany, China, Japan, and the Eurozone is discussed. Even though the US has remained a relatively bright spot in an otherwise struggling global economy, doubts on the US's economic ability to accelerate have progressed as some of its biggest trading partners struggle. The article also states that if foreign growth is slower than expected, the US economy could face consequences as the Fed is forced to increase rates more slowly than otherwise expected. There is much debate on who should step in and what measures should be taken on how to stimulate growth. The IMF has said that they will pursue "bold and ambitious measures" to revive growth, cut debt levels and ensure stability in financial markets. In fear of crisis and strong hope that officials will take care of current problems, what should the US do in a global slowdown? The article illustrates the difficulty of reforming in a recession, stating that most of the approaches officials are pushing now - increased investment, structural overhauls to labor laws and other regulatory changes - are difficult to craft and even tougher to enact quickly. What are your comments on this global slowdown, any stimulus measures, and how the US can/should be involved in stimulus measures?
http://online.wsj.com/articles/global-signs-of-slowdown-ripple-across-markets-vex-policy-makers-1413148874
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ReplyDeleteThis reminds me of an article I read this summer where one economist predicted the next financial crisis in the United States to be caused by external global shocks, not internal ones. It seems that we are increasingly dependent on the global market for basic necessities. And with China slowing down its rapid growth, we either have to look to another region to make cheap materials for us or deal with higher prices in our economy. I think investors are still quite wary about the US market since the financial crisis, so the economy may take further stimulus to get going. Interests rates are still basically zero! This shows that there is still a lack of consumer confidence in the US.
ReplyDeleteWhat will it take? A new region (like Africa) to begin expanding rapidly? Will it take a new technology? Maybe a new form of fuel? But for all practical purposes, we can assume that we will still have troubling growth rates unless the global market picks up.
I agree with Bret that the US is very dependent on the global market, not only to meet our basic needs but for other nations to buy our exports as well. Once again, I agree that due to the financial crisis, consumer confidence has fallen a lot. Ultimately, I think it is definitely in the US best interest for now to support foreign economies especially when we depend on them so much for both our imports and exports.
ReplyDeleteAll around the world, Germany, Greece, China and many other countries are struggling. However, I strongly believe that U.S has enough resources and capabilities to help recover the worlds economy. US economy's pulse is still strong and U.S. is still the World’s No. 1 Economy. I also agree that U.S's best interests is to support foreign economies.
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