Skip to main content

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions

Will the Global Economy Add Up?

While 2013 will not be a banner year for the global economy, it may nonetheless come to be viewed as the first year of the post-crisis period. The main danger is that around the world there seems to be far more planning for export-led growth than acceptance of reduced competitiveness and increased imports.

CAMBRIDGE – This year has begun on a note of cautious optimism for the global economy. Europe is back from the brink. The United States did not fall over the fiscal cliff. Japan is moving to change its economic strategy, and China appears to be getting back on track.

Financial-market indices in the US, moreover, are near pre-crisis levels, and expected volatility is at multi-year lows. Major financial institutions are, for the most part, better capitalized than they have been in a long time. Balance sheets have been repaired, and many actors are awash with cash. While 2013 will not be a banner year, it may nonetheless come to be viewed as the first year of the post-crisis period.

To be sure, the political environment remains challenging almost everywhere. The US will face a trifecta of new fiscal hurdles – lack of legal authority to pay debt, no operating budget for the federal government, and the dreaded prospect of sequestration – before the end of March. Crucial elections lie ahead in Italy and Germany. China’s new government comes to power amid unprecedented levels of public concern about corruption and inappropriate enrichment of public officials. And it is not clear that Japan’s fractured politics will permit stable governance in the years ahead.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.


Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.;
  1. bildt70_SAUL LOEBAFP via Getty Images_trumpukrainezelensky Saul Loeb/AFP via Getty Images

    Impeachment and the Wider World

    Carl Bildt

    As with the proceedings against former US Presidents Richard Nixon and Bill Clinton, the impeachment inquiry into Donald Trump is ultimately a domestic political issue that will be decided in the US Congress. But, unlike those earlier cases, the Ukraine scandal threatens to jam up the entire machinery of US foreign policy.