A chart from the OECD’s latest economic outlook:
The report calls mostly for conventional measures aimed at reducing global imbalances: medium- and long-term fiscal consolidation in debtor countries, and policies to spur domestic demand in the surplus nations.
It also expresses the concern that a further decline in US house prices will constrain household wealth (a valid worry) but hopes that business investment will pick up given the high corporate profits of the last year.
Here is a breakdown of the outlook for the OECD against some of the larger emerging markets:
Meanwhile, the report’s author, OECD chief economist Pier Carlo Padoan, was reportedly asked at a briefing what he thought of the Fed’s QE2:
“There are downside risks,” Padoan said, “but we have nothing left.”
Hopeful, that.
Related link:
Economic Outlook – OECD
Emergification has arrived – FT Alphaville
FT Tilt – a new service from the Alphaville team