[lbo-talk] A world turned inside out
marvgand2 at gmail.com
Mon May 1 13:52:39 PDT 2017
The decade since the financial crisis has underlined the epochal shift in the world economy from the US-led core capitalist countries to the newly emergent ones led by China, writes investment banker and China specialist Stephen Roach.
"The pendulum of world economic growth has swung dramatically from the so-called advanced countries to the emerging and developing economies. ...It is a stunning development", he says.
"From 1980 to 2007, the advanced economies accounted for an average of 59% of world GDP (measured in terms of purchasing power parity), whereas the combined share of developing and emerging economies was 41%.
"According to the IMF’s latest forecast, those shares will completely reverse by 2018: 41% for the advanced economies and 59% for the developing world.
"Growth in global trade slowed to a 3% average pace over the 2008-2016 post-crisis period – half the 6% norm from 1980 to 2016. Yet, over the same period, GDP growth in the developing economies barely skipped a beat. This attests to a developing world that is now far less dependent on the global trade cycle and more reliant on internal demand.
"All of this speaks to a radically different world than that which prevailed prior to the Great Financial Crisis – a world that raises profound questions about the efficacy of monetary policy, development strategies, and the role of China."
"The persistent divergence between developed and developing economies has now reached a critical point.
More information about the lbo-talk