Global economic outlook – 1st quarter 2009
Stability implies a lack of near daily shocks. It does not imply good times. Although there are no longer daily shocks, there are some shocking things happening. These include a nearly synchronous decline in economic growth throughout much of the world, a rapid drop in commodity prices, a rapid decline in a variety of other asset prices, and shrinkage of global trade, in part brought on by failings in the market for trade finance. Yet perhaps the most shocking event is the dramatic change of mindset regarding government policy and the proper role of government in the economy. Much conventional wisdom has been thrown out the window as governments navigate a new landscape, contemplate the unmentionable, and take actions once thought inconceivable. There is almost too much to absorb.
