A new Brookings study is cautioning that the global economy is on the verge of another slump. The only bright light? The United States. FT has the summary:
The Tiger index shows momentum in the global economy dissipating despite action by the Federal Reserve, European Central Bank, Bank of Japan and Bank of England to boost the recovery. Only in the US has economic momentum remained reasonably robust, while it has slackened off in the formerly strong economies such as the Brics (Brazil, Russia, India and China).
Can America’s momentum continue as the rest of the world slides into recession? It’s hard to say. The U.S. is a huge, self-reliant, largely closed economy, so it’s not impossible to imagine that this trend could continue. At the same time, the global financial sector is largely as integrated as it was in 2008, so a global crisis could easily infect the tepid but sustained growth we’re seeing the U.S. right now.Regardless, it seems clear that even with several blue model drags on the economy presenting real challenges that will have to be met in the future, the U.S. requires far fewer structural reforms than most other places in the world, and is better positioned to rebound in the coming years.