Five years ago, the global economy avoided a second Great Depression. Five years on, the journey is not yet complete, but the fog of crisis is lifting—and we can see that its aftermath leaves us with multiple new transitions.
After five years of the Great Recession of 2008-2009, we are still in the aftermath,and has left us with multiple transitions.
Two in particular stand out: a transition in the patterns of economic growth, and a transition toward a different kind of financial sector.
The IMF will release its latest economic forecasts. Overall, the global outlook remains subdued. In many of the advanced economies, however, we are finally seeing signs of hope. Growth is looking up, financial stability is returning, and fiscal accounts are looking healthier.Advanced Economies
The Euro Area too is going through a major transition,now, after six quarters of recession, the region came up for air last spring, and growth should be back in positive territory next year—almost 1 percent.
Yet unemployment—at 12 percent—is still far too high. In some countries, one in four people cannot find work, and one in two young people.
We are witnessing an ever-closer European fiscal and financial integration—even if we recognize that much more still needs to be done.
Japan too is going through transition—as it seeks to overcome longstanding deflation and stagnation. The government’s aggressive stimulus policy seems to be working—boosting GDP by about 1 percent. Deflation is coming to an end and a newfound optimism is in the air. Yet this Japanese effort is not complete either.
