By Eswar Prasad and Karim Foda
The world economy is showing scattered signs of vigor but remains on life support, mostly provided by accommodative central banks. Concerns about spillover from a worsening of the European debt crisis and slowing growth in key emerging markets are putting a damper on consumer and business confidence. Equity markets are pulling back from a robust performance in the first quarter of this year as the sobering reality of a continued anemic recovery weakens investors’ optimism.
There are some positive signs in the latest update of the Brookings Institution-FT Tracking Indices for the Global Economic Recovery (TIGER), but also much to worry about as the world economy continues to meander with no clear sense of direction. Read more
By Shankar Acharya
What might 2011 hold for us? Given the intrinsic uncertainty about the future, the really honest answer would be: I don’t know. But that would be far too boring a response and, perhaps more to the point, would not fill a column. So, at the risk of looking foolish in a year’s time, here are some predictions for 2011. Read more
In March the Reserve Bank of India (RBI) published the balance of payments data for the October-December quarter of 2009. It elicited surprisingly little comment. Surprising, because for the second quarter in a row the current account deficit was well above 3 per cent of GDP. Read more
“Chindia” is the word coined by the Indian politician, Jairam Ramesh, to denote the two Asian giants that contain 38 per cent of the world’s population between them. Nor is size their only similarity. Both are heirs of ancient civilisations; both were, until recently, desperately poor; and both are among the world’s fastest growing economies. Yet the differences are also striking. By looking carefully at them one can learn more about their prospects for continued growth. The economists’ technique of growth accounting helps shed a bright light on the story. A recent paper by Barry Bosworth and Susan Collins of the Washington-based Brookings Institution does just that*. It compares performance over the 1978-2004 period, but the years since 1993 are particularly interesting, since they succeed India’s post-1991 reforms. The remainder of Martin Wolf’s column can be read here (FT.com subscribers only). Discussion from our guest economists is free. Read more