«As for the future, Blanchard hedges his bets. It seems that the advance capitalist economies are going to suffer much lower growth “There is a good chance that we have entered a period of low productivity growth. There is a chance that we have entered a period of structurally weak demand, which will require very low interest rates.” This is bad news for the strategists of capital, for which he is a leading economic consultant, as “low growth combined with increasing inequality, is not only unacceptable morally, but extremely dangerous politically”.
Blanchard offers no explanation about why market economies around the world are slowing down and delivering lower productivity growth and rising inequality. But it is a moral dilemma, and even more worrying, ‘politically dangerous’ to capitalism.»
No doubt in our mind, the people’s anger is growing every day of capitalist production.
The G20 group of top economies meets in Turkey this weekend. For the meeting, the IMF issued an update on the state of the global economy – and the IMF is worried. It points out that global growth in the first half of 2015 was lower than in the second half of 2014, reflecting a further slowdown in emerging economies and a weaker recovery in advanced economies. Productivity growth has been persistently weak.
So, once again, the IMF has lowered its confidence in global growth, and yet, once again, expects a ‘modest’ pick-up in the 2nd half of this year and into 2016. But apparently the « risks are tilted to the downside, and a simultaneous realization of some of these risks would imply a much weaker outlook. »
This G20 meeting was the last for the IMF’s chief economist, Olivier Blanchard, who is leaving to take up a lucrative…
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