The concerns
Maurice Obstfeld argues that the current upturn in global growth is temporary and presents five reasons why the current momentum will not be durable. Among them: a lower long-term potential growth for advanced economies, high government debt, growing inequality.
The Current Economic Sweet Spot Is Not the “New Normal”
By: Maurice Obstfeld – IMF
The potential growth issue
Three are the factors that are contributing to the slowing potential growth according to Shanta Devarajan: a) slowdown in investments, b) shrinking labor force and c) slowing total factor productivity.
Forecasting global economic growth in 2018
By: Shanta Devarajan – Brookings
The inequality issue
Rapid growth cannot act “as a virtual panacea” for countries’ political and social woes when the benefits accrue to the top 5% or 1%, argue Derviş and Qureshi. This is why social tensions are bound to rise.
There’s danger in today’s good economic news
By: Kemal Derviş, Zia Qureshi – Brookings Institution, World Bank
A more philosophical note
Individual countries are unlikely to drive systemic change—this is a case where collective action on a negotiated path forward is most desirable. Yet wholesale change is also the least likely scenario. Instead, in all probability, 2018 will bring continued experimentation with state capitalism and state-captured capitalism; shareholder societies and stakeholder societies; countries investing in renewables and those resisting them; and multilateralists and nationalists.
Can capitalism be saved from itself?
By: Homi Kharas – Brookings
