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Global Recovery 'Tenuous,' Years of Slower Growth Ahead, Former IMF Economist Says
Posted Oct 20, 2009 01:04pm EDT by Peter Gorenstein in Newsmakers, RecessionThe recession may be over but with unemployment hovering near 10%, talk of a V-shaped recovery is exaggerated, says Zanny Minton Beddoes, economics editor at The Economist.
Like famed investor George Soros, Minton Beddoes believes in a 'backward square-root shaped' recovery, i.e., a sharp recovery followed by a prolonged bout of slow or no growth. "We may be in a world economy that congenitally has a slower speed limit as a result of this crisis," she says.
At this point the "global recovery is tenuous," the former IMF staff economist tells Tech Ticker. More importantly, "it's a recovery on the back of government support."
Government intervention has created stability in the near term, but "sustainable recovery has got to be a recovery based on private sector demand," she says.
Whether a fragile global economy can transition to one based on increased consumption in Asia and the emerging markets and more savings in the U.S. remains to be seen, Minton Beddoes says. By the same token, whether emerging market economies can continue to soar while the U.S. muddles along is the "$60 trillion question."
Editor's note: The accompanying video was taped last week at The Economist's Buttonwood Gathering. See below for additional coverage:
- Niall Ferguson: U.S. Empire in Decline, on Collision Course with China
- Wake Up Washington! China Is Already Dumping the Dollar, Niall Ferguson Says
- The Dollar Is Dying a Slow Death, says Niall 'Ascent of Money' Ferguson
- Current Market Boom "Can't Be Trusted," Robert Shiller Says
- Robert Shiller: We Could Have Another Housing Boom, But I Doubt It
- A 'Remarkable' Gathering: Soros and Roach and Geithner, Oh My!
- Exit Strategies: Worry More About Uncle Sam, Less About Uncle Ben
- "Astonishing" Big Banks Are Taking Taxpayer Money, Writing the Rules, Warren Says
- Elizabeth Warren: Housing Market Getting Worse, Not Better
- Wall St. Is Winning: Elizabeth Warren "Speechless" About Record Bonuses
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