International Economic Outlook

INTERNATIONAL ECONOMIC OUTLOOK By Evangelos Otto Simos, Ph.D. ThE GREAT STAGfLATION Of 2010-2011 I. Global assessment and outlook Available data and analysis of recently introduced economic policies around the globe, both on fiscal stimuli and money printing or so called “quantitative easing”—indicate that the expected worldwide recovery is still on track, but it has lost its initially expected momentum, particularly in the major industrial countries. The policy-induced moderate upswing is in danger of coming to a standstill. The probability of a double dip scenario in the global business cycle has increased with the renewal of inflationary expectations and the rebirth of uncertainties about the course of future policies as well as the role of government, which both will continue to depress private investment, productivity, and jobs. Following a steep decline by an annual rate of 8 percent in the last quarter of 2008, preliminary data on the first quarter of 2009 shows that the combined output of the member countries of the Organization for Economic Cooperation and Development (OECD)—the 30 richest economies in the world—has fallen at an annual rate of 8.4 percent from ...