Developing Countries Confront a Wall of Capital
Carnegie Endowment submits:The economic recovery from the Great Recession is well underway. Global industrial production and world trade have returned to their pre-crisis levels and most economies are now growing at levels close to their long-term averages.While the easy, bounce-back portion of the recovery is over, the slower, more difficult process of restructuring economies and labor markets continues. This process will dictate the pace of expansion, particularly in those economies most affected by the excesses of the boom period and its subsequent crash, notably the United States, high-income Europe, and many countries in developing Europe and Central Asia. At the global level, growing differences in the extent of spare capacity and in macroeconomic policy stances are causing tensions that could create destabilizing capital flows and threaten growth in developing countries, which have been the major drivers of the global recovery so far.Complete Story »
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