Tuesday, October 4, 2016

Economist at the IMF shares a repeated warning-


Woes in wealthy countries to offset emerging-market turnaround, says IMF
The IMF is the most important source of global economic news. Being the chief economist carries tremendous weight. Mr. Obstfeld -the chief economist of the IMF has spoken- he states

1.      Problem with the world economic growth is that emerging markets ( the laggards in the global economy) are starting to grow but the advanced economies are growing very slowly.
2.      According to Mr. Obstfeld developed countries as a result of long term slow growth and high debt levels are experiencing protectionist sentiments and anemic investment trends.
3.      China’s economic growth is slowing down and its excess industrial capacity and high debt levels could be a problem.
4.      He concludes with there are moves that policy makers can make to increase global growth
Is it me or does economist talk in languages that are difficult to understand. If the world economies are slowing down and if there are systematic issues facing the worlds’ largest economies namely debt levels and if there are solutions to these problems then why are not these solutions implemented? Who is Mr. Obstfelds audience?
My take is that KEYNESIAN economics must be balanced with traditional savings = investment and trade imbalances and deficit spending are recipes for long term problems.

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