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Quo vadis world economy

Problems persists after the

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Quo vadis world economy

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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

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