Theworldeconomy1

1、The world economy Buckle down Apr 16th 2009 | WASHINGTON, DC From The Econo mist print editi on Recovery from the recession, when it comes, will be slow and p ainful IS THE worst over for the world economy? In rece nt weeks finan cial markets have latched on o the “ greeoots ” thesis, rising smartly

2、 as an array of statistics turned out to be less dire tha n exp ected. P olicymakers, too, have beg un to sound less p essimistic. On April 14th both America s biggest econo p reside nt, Barack Obama, and its cen tral-ba nk boss, Ben Berna nke, poin ted to sig ns of p rogress in stabilis ing the wor

3、ld Op timism may be fashi on able, but there are p le nty of reas ons to fear it is premature. The up beat thesis focuses on firms and their inven tories. The global economy slu mped at the end of 2008 in part because firms slashed p roducti on eve n faster tha n dema nd fell. Now that the stock pil

4、es have shr unk, out put should stop slu mping. This may be happening. Forward-looking surveys of manufacturers have improved. The dan ger, however, is that too much emp hasis on the stock cycle misses the un derly ing characteristics of this dow nturn. This is mai niy a bala nce-sheet recessi on pr

5、ecip itated by a finan cial crisis. And it is a dow nturn that it is unu sually syn chr oni sed aro und the globe. As an an alysis in the IMF WortdWEc ono mic Outlook makes clear, each of these characteristics points to a dee p recessi on and a weak recovery. The fund s econo mists exam ine 122 rece

6、ssi ons in rich econo mies si nee 1960. They find that in the aftermath of a finan cial bust, p rivate inv estme nt tends to fall eve n after the dow ntur n reaches its trough, whereas p rivate consump tio n grows more slowly tha n in other recoveries. Recoveries from globally synchroni sed recessi

7、ons take 50% Ion ger tha n other recoveries. Some gree n shoots are already wilti ng. America s retail sales fell in March. And dark shadows are looming, p articularly the sp ectre of deflation. America s consumer prices fell by 0.4% in the year to March, the first annual decli ne since 1955 (see ch

8、art). Con sumer p rices are once aga in falli ng in Japan and are barely risi ng in the euro area. No one doubts that a proIon ged p eriod of deflati on would p ose grave dan gers. Falli ng p rices would raise the real burde n of debts. The prospect of lower p rices would weake n dema nd. But op tim

9、ists still regard that risk as remote. Today s deflation, they argue, is nothing more than the temporary con seque nee of falli ng fuel costs. Exclude food and fuel and America s core consumer prices are still rising at 1.8%, within the central bankers ideal range and well above the lows reached dur

10、ing America last deflati on scare in 2002. This sanguine attitude has evide nee to support it. Not only have central ban kers opened the mon etary floodgates, but America n con sumers exp ectati ons for future in flati on have barely cha nged in rece nt mon ths. Still, there are reas ons to fret. Con sumer surveys suggest the share of people who expect their in comes to decli ne is the highest on record. Wholesale -p rice figures suggest that p rices other tha n en ergy are falling further dow n the supply cha in. The share of small bus in esses in America that are cutt