Founded after World War 2 to administer the Marshall Plan in Europe, the OECD has been the preeminent force behind globalization in the world for decades. They are, quite literally, the New World Order and they don't like what they're seeing now, with Trump, Le Pen, revolt in Netherlands and Italy -- the whole nationalist movement that is sweeping the planet.
Their chief concerns lie in trade, citing protectionism as something that might truly derail global GDP growth. The culprit? Citizens no longer trust their governments, making it harder for national governments to enact pro globalist strategies (extra Trump).
“We have acceleration but I’m concerned about this really soft foundation to the recovery,” OECD Chief Economist Catherine Mann said in an interview. “We still have this slow, sluggish productivity growth and persistent inequality. Put those together and it’s hard to see the robust consumption and investment profile you need to really get things going.”
Though not named in the report, some of the concerns are related to the policies of U.S. President Donald Trump’s administration, including his threats to impose tariffs on nations he deems to have an unfair advantage, The OECD also said there’s a “disconnect” between equity valuations and the outlook for the real economy, with the market performance partly linked to anticipation of a Trump stimulus package.
“We think the dynamic response to increased protectionism could be really quick, so we have a pretty significant downward bias on what it could mean for growth,” Mann said. “What we mean by that is the way businesses will respond by raising prices and cutting trade flows.”
“Although risks may not materialize immediately, they remain a real possibility and a set of large shocks, possibly interacting with each other, would disrupt the recovery..
Falling trust in national governments and lower confidence by voters in the political systems of many countries can make it more difficult for governments to pursue and sustain the policy agenda required to achieve strong and inclusive growth."
Question for you homegamers: if you have a decent job and prices are stable, why do you need growth?
Content originally generated at iBankCoin.com