This article is about the future prospects of the world economy after this most recent recession. It seems that the worst is behind us, being that output has ceased its shrinking in all of the World's largest economies. Additionally, the IMF, in its latest forecast, has reckoned that global GDP will expand by 3.1% next year, 1.2 percentage points faster than it forecast in April.
However, as we have learned in this course, not all growth is promising for the future of Country's economies. The article states, "Unemployment is still rising and much manufacturing capacity remains idle. Many of the sources of today’s growth are temporary and precarious. The rebuilding of inventories will not boost firms’ output for long." This is describing the fact that the wealth and prosperity of Countries lied within intensive growth, not extensive. Extensive growth operates with diminishing returns, so over the long-haul it does not promote prosperity. It is important, then, for Country's to focus on the long-term, and increase education and other elements of intensive growth.
1 comment:
I think this is especially interesting after having learned about what has happened in many other countries in class. By looking at history, we know it is difficult to keep having consistent growth. For example, Japan grew for a long time because they started with low technology, and grew, but the growth rate seemed to diminish as they continued to gain. I agree that we may have reached a point where we will have to accept a "new normal", for our own reasons.
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