Wednesday, August 19, 2009
IMF chief economist Olivier Blanchard assesses the current state of the economic crisis. Salient points: potential output has probably been permanently reduced; growth rates in recovery will be low; the global economy needs to be restructured, with domestic consumption increasing in Asia and decreasing in the West. The last point is more a wish than un constat, and one might welcome a fuller discussion of how such adjustments might occur. But as an overview of where things stand, this is a useful summary.