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Global Economy

World Economy – a glass half empty or half full?

As Kaushik Basu said yesterday, downside risks to the global economy have diminished, market conditions look better, borrowing costs in advanced economies are down from worrying levels seen last June, and developing country growth is still in the 5 percent range. Yet this improvement is transmitting to the real side very minimally.

That was just one of the takeaways from Global Economic Prospects 2013, launched January 15. A new-look global outlook site allows users to access a wealth of analysis, forecasts and data for the world’s economies.

Global Economy and Development Roundup

Swati Mishra's picture

In the recently released Global Economic Prospects June 2012, World Bank experts warned of long period of volatility. Resurgence of the Euro Area tensions had eroded economic gains of first 4 months of 2012, said the report.  And as the leaders of the 27 European Nations convened in Brussels yesterday to tackle the crisis, it was labeled as the “last chance” summit. The outcome: Up All Night, But Consensus Finally Reached, says a Time.com story. According to the story, published today, “Yet, despite what were described as tense and grinding negotiations, decisions announced early Friday morning appear to represent important steps towards the survival of the embattled euro zone—and in both the short- and long-term context of the crisis.” This much needed move comes at a crucial point and will hopefully have a positive impact on developing countries. However, a lot remains to be done. Following is a sampling of some interesting research and analysis by World Bank as well as others highlighting issues of current import to global economy and development.

How did US and EU trade policy withstand the Great Recession?

Chad P Bown's picture

Many feared a return of 1930s-style protectionism when recession hit the global economy. But many countries avoided this. In a blog post, co-authored with Meredith Crowley, I focus on US and EU trade policy and discuss how this policy withstood the ‘Great Recession.’ The following is an excerpt from the post which appeared on Vox.

“During the Great Recession, import protection increased around the world (Evenett, 2011). Popular policies included antidumping tariffs, safeguards, and other temporary trade barriers (Bown 2011a,b). Despite this, for high-income economies such as the US and EU, such trade barriers increased much less than initially feared. In this column, we ask how and why.

Michael Spence and the Next Convergence

Merrell Tuck-Primdahl's picture

Nobel-winning economist Michael Spence spoke at the World Bank yesterday about how economic convergence between developing and developed countries has been a 100 year-old process, the first half of which is now over, with the global economy now facing significant strains, stresses and challenges. Find out from my interview with him why he thinks globalization and growing interdependence has outrun our governance institutions and learn about what he sees as the most important challenges ahead. The full lecture is also well worth a view.

Video interview with Joe Stiglitz on Financial and Real Crises in the World Economy

Merrell Tuck-Primdahl's picture

According to Nobel-winning economist Joseph Stiglitz, creating jobs amidst today’s low-demand, high-debt environment is a tall order. It will require viable structural employment policies, unemployment insurance for laid off people, and -- in the case of the US – facing up to the inevitable shift out of the manufacturing sector into services.  Stiglitz, who delivered a DEC Lecture at the World Bank on September 26 on ‘The State of the Global Economy: An Agenda for Job Creation’, warned that far more is broken than the banking and financial systems in high income countries. He argues that a lack of aggregate demand is a huge problem that can only be fixed through smart public as well as private investment in education, infrastructure, and innovative technologies to protect the environment. He also described the current phenomenon whereby productivity in manufacturing is exceeding the rate of growth in demand in the sector, which means jobs on factory floors are being shed. In other words, technical change can induce large distributive consequences and lead to long term unemployment. Listen to my interview with him about what can be done to cure our current ills.