GLOBAL ECONOMIC PROSPECTS
Adam S. Posen,
David J. Stockton, and
Nicholas R. Lardy
WASHINGTON, DC—Peterson Institute experts forecast that for the next two years the United States will continue its weak economic recovery, while the euro area will stagnate on net. The ongoing sub-par growth in the United States and Europe is eroding economic potential and the prospects for debt reduction. In contrast, Peterson Institute experts forecast a continued slowdown in China in 2013, but are optimistic this slowdown will be temporary and may be a prelude to needed rebalancing away from excessive savings and investment.
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Read the news release: Two out of Three Are Bad—And Slow Growth Now Diminishes Future Growth
Peterson Perspectives Interviews
A Gloomy Outlook in Europe: Part I
Adam S. Posen says a "panic" by European economic policymakers led to too much fiscal consolidation, unnecessarily stifling prospects for economic growth.
A Gloomy Outlook in Europe: Part II
Adam S. Posen says that while the threat of a European crisis disrupting the US economy has eased, Europe's economic woes continue to cast a shadow over the struggling US recovery.
Fiscal Cliff-hanger: The US Economic Outlook, Part I
David J. Stockton predicts more anemic economic growth over the next year and a half but a bright spot in housing.
Fiscal Cliff-hanger: The US Economic Outlook, Part II
David J. Stockton explains why the dangers to the US economy of going over the fiscal cliff are far more serious than most analysts say.
PIIE Noted in the News and on the Web
Posen Says US Fiscal Deal Easier than Believed
Adam S. Posen tells Bloomberg's Mark Crumpton that the US deficit problem is really two issues: a 2.5 to 3 percent gap between spending and revenues, and healthcare cost containment.
Stockton Says Fiscal Cliff Effect May Exceed CBO's Estimates
The Congressional Budget Office reported going over the "fiscal cliff" will shrink US GDP by 0.5 percent in 2013, but David J. Stockton warns that going over the cliff will be much more costly.
US Economy to Grow 2.3 Percent in 2013
David J. Stockton's economic forecasts for the United States in 2012, 2013, and 2014 are discussed in the article.
Wall Street Journal
Tour of Troubles in World's Largest Economies
Sudeep Reddy summarizes the Global Economic Prospects presentations by Adam S. Posen, David J. Stockton, and Nicholas R. Lardy.
Lardy Sees Continuity in US-China Relationship
Nicholas R. Lardy expects that President Obama will continue a high level of engagement with China's leadership while continuing to be tough on China when it does not play by the rules.
The Washington Post
Advice for China's New Guard
The Washington Post brings together leading experts on China to give advice to Xi Jinping and China's other incoming leaders. Nicholas R. Lardy recommends putting forward a plan to eliminate the remaining price controls in the Chinese economy within the first 100 days.
Wall Street Journal
Lardy vs. Pettis: Debating China's Economic Future, Round 2
In the second round of this debate, Nicholas R. Lardy explains how rapidly the downward adjustment in the investment share should occur, whether more robust consumption expenditures could offset part of the downside of slowing investment, and what the role of government policy should be in shaping the rebalancing.
Obama, Romney Seen to Have 'Flawed' Economic Plans
Jacob Funk Kirkegaard explains to Bloomberg TV why both Obama and Romney have fairly flawed economic plans. Kirkegaard later argues the United States has the most flawed tax system in the world because the process is lobbyist-driven.