Message in a Bottle
FMI/Blog Simon Johnson
Washington, 9 de abril 2008
Por Simon Johnson
“… The global economy can get back on track. But it will stay on track (i.e., high, stable growth) only if global imbalances are addressed — the US is bringing its deficit down, but others are having more difficulty dealing with their part”. (Blog de Simon Johnson. FMI)
“Chapters 1 and 2 of the World Economic Outlook are officially unveiled at 9am this morning at our press conference. The media have had the report for short while already — but “under embargo” so they can only run stories once the press conference starts…
There will be, no doubt, a lot of attention on the forecast numbers. And I’ll return to this topic later in the day (much later, as there are a lot of follow up media interviews; we’ll post a sample here when they become available).
Let me just say now that I hope one of our key messages doesn’t get lost. Global imbalances (some countries with large current account surpluses and others with large current account deficits) are absolutely central to what has happened over the past year.
Sometimes, it seems, the discussion is all about what a particular central bank did or did not do, or what it now can or cannot do. That is fine and often important. But keep in mind that long-term interest rates have been low over the past 5 years primarily because people in some parts of the world (e.g., Asia, the Middle East) want to save a great deal, and it is not easy to find a way to employ those savings in a productive, safe and stable fashion.
The global economy can get back on track. But it will stay on track (i.e., high, stable growth) only if global imbalances are addressed — the US is bringing its deficit down, but others are having more difficulty dealing with their part. There is a framework for dealing with all this, the Multilateral Consultation agreed by key countries this time last year. And this Consultation was designed precisely to prevent any small bumps in the global economic road from becoming major accidents.
Hopefully, this message will continue to get through”.
