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1. ? Quo vadis? world ? economy Alex Izurieta UN / DESA
IDEAs 10th Anniversary Conference
2. Problems persists after the great recession Uneven global income distribution, overborrowing and underconsumption
Private sector balance sheet stress
Unfettered financial institutions
Pressure on fiscal budgets (crowding out or baling out?)
Inadequate aggregate demand
Pressure on natural resources and the environment
3. A muddling through option Sluggish growth in developed economies (financial fragility, deleveraging, impotent monetary policy, un-welcomed fiscal policy)
Major emerging economies in a moderating pace, vulnerable to international trade and finance, not yet fully regionalized
Other developing countries pending on an export recovery (of commodities)
4. Muddling through: a technical growth scenario
5. Muddling through: convergence slow and partial
6. Muddling through: employment: problem for all
7. Muddling through: imbalances take on again
8. The muddling through option will not likely stand Vulnerable and fragile
Unsatisfactory outcomes call for some kind of action
The louder voice in the developed world calls for fiscal austerity and hopes of export recovery
The developing world between perplexity and hope of decoupling
9. A fiscal austerity scenario: weaker demand & protracted
10. A fiscal austerity scenario: debt not notably reduced
11. A fiscal austerity scenario: employment far worse
12. A fiscal austerity scenario: employment far worse
13. A fiscal austerity scenario: shifting external imbalances
14. A coordinated employment growth scenario Stronger stimuli, targeted to jobs, to greener technologies, and to private investment
Internationally coordinated to avert speculative attacks and protectionist responses, aimed at correcting imbalances
Effective debt-work out initiatives
Development oriented (infrastructure, know how, market access, etc.)
15. The employment growth scenario growth delivers
16. The employment growth scenario employment catches up faster
17. The employment growth scenario external imbalances improve
18. The employment growth scenario fiscal balances improve
19. Conclusion: what lies ahead for the next 10 years? At the trough of the recent recession, attention to policy action and international coordination grew, winning the policy debate
But stimuli were inadequate
A sluggish recovery is changing the ground, likely bringing back the world economy to a new recession
Genuine alternatives are feasible, but these must persuade, hopefully before a deeper crisis