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The Year Ahead 2018

The Global Economy’s Risky Recovery

As the advanced economies’ post-2008 recession fades into the distant past, global prospects for 2018 look a little better than in 2017. The shift from fiscal austerity to a more stimulative stance will reduce the need for extreme monetary policies, which almost surely have had adverse effects not just on financial markets but also on the real economy.

NEW YORK – A year ago, I predicted that the most distinctive aspect of 2017 would be uncertainty, fueled by, among other things, Donald Trump’s election as president in the United States and the United Kingdom’s vote to leave the European Union. The only certainty, it seemed, was uncertainty – and that the future could become a very messy place.

Throughout 2017, Trump proved every bit as bombastic and erratic as expected. Anyone who paid attention only to his incessant tweets might think the US was teetering between a trade war and a nuclear war. Trump would insult Sweden one day, Australia the next, and then the EU – and then support neo-Nazis at home. And the members of his plutocratic cabinet rival one another in terms of conflicts of interest, incompetence, and sheer nastiness.

There have been some worrisome regulatory rollbacks, especially concerning environmental protection, not to mention the many hate-driven acts that Trump’s bigotry may have encouraged. But, so far, the combination of America’s institutions and the Trump administration’s incompetence has meant that there is (fortunately) a yawning gap between the president’s ugly campaign rhetoric and what he has actually accomplished.

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