By Martin Wolf
Last January I noted the optimistic view of prospects for the world economy (“Globalisation’s future is the big long-term question”, January 9). But I also stressed two contrasts: the first was between this optimism and the risks being created by the excess of savings over investment in big parts of the world economy; and the second was between the economic optimism and pessimism about political prospects (“A divided world of economic success and political turmoil”, January 31).
We now know that the economic risks were indeed significant. We also know that the economics converged on the politics, not the other way round. But last year also created a new contradiction: between pessimism about short-term prospects for the high-income countries, particularly the US, and cheerfulness about the outlook for the developing world.
So will we see convergence on the worse of the two trends in 2008, once again? Or will the dynamism of the developing countries keep the world economy expanding quickly?
The remainder of this column can be read here. Debate from our panel of economists appears below.
