Global Economic Prospects: Spring 2015
Unedited rush transcript [pdf]
The Peterson Institute for International Economics hosted its semiannual Global Economic Prospects session on April 7, 2015. David J. Stockton, PIIE senior fellow and senior adviser at Macroeconomic Advisers LLC, presented the US and global economic outlook and explored its implications for macroeconomic policies, especially the widely anticipated start to the withdrawal of monetary accommodation. Jacob Funk Kirkegaard, senior fellow and an expert on the political economy of Europe, assessed recent developments there, including the European Central Bank's adoption of quantitative easing and the responses to the Greek election and crisis, and explored the challenges but also the positive prospects that still lie ahead for European recovery. Nicholas R. Lardy, the Institute's Anthony M. Solomon Senior Fellow and author of the widely-acclaimed Markets over Mao, discussed the sources and direction of the Chinese economic slowdown and provided perspective on the implications of his outlook for the direction of economic policies in China.
Some significant shifts in the global environment have created uncertainty about and dispersion between the major economies' outlooks. A sharp divergence in the likely direction of the monetary policy of the United States relative to the other major advanced economies has contributed to dramatic movements in exchange rates. Oil prices have plunged, creating strong tailwinds for many economies and very heavy headwinds for a few. Those declines in the price of oil have also fed into very low inflation or outright deflation outcomes in many key economies. And, even abstracting from the effects of lower energy prices, trend inflation appears to be running well below the targets of the world's major central banks.