Book
Get a copy of The American Phoenix, by Diana Choyleva and Charles Dumas HERE.
2012 will bring another global economic crisis. It could have been avoided if America and other deficit countries had embarked on currency devaluation and tighter domestic policy to sustain recovery and growth, boost exports and savings, while cutting excessive debts built up in the pre-crisis ‘gilded age’. But they didn’t. Instead, they continued to run large government deficits, effectively transferring debt from private to public hands, rather than reducing it through rising national savings rates.
Savings-rich countries, notably China, have not helped. To get the global economy in better balance they needed to reduce exports by revaluing their currencies and encouraging domestic demand. Instead, the second, third and fourth largest economies in the world have continued to increase their net exports, thwarting recovery in the United States, Britain, and southern Europe. This economic imbalance, say Dumas and Choyleva, is going to cause another global economic crunch.
And afterwards?
Perhaps surprisingly, but with impeccable reasoning, Dumas and Choyleva go on to argue that America will emerge from the slump in the strongest shape, China will struggle unless it takes steps to tackle its structural problems, Eurozone countries like Spain, Portugal and Greece are in for a depressing decade, while Britain, because of its labour market and exchange rate flexibility, will be in better shape to emulate America’s recovery.
About the Author
Diana Choyleva is a leading expert on China’s economy and politics. She is Chief Economist at Enodo Economics, an independent macroeconomic and political forecasting company she set up to untangle complexity, challenge the consensus, and give pointers to the future by making sense of today. Enodo’s focus is China and its global impact.
Diana has been covering China for over two decades. She writes regular opinion pieces for the FT, WSJ, Nikkei Asian Review, Foreign Policy etc. She has extensive global experience engaging with all manner of audiences and is a regular commentator on Bloomberg, the BBC, CNBC and others.
