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Jan

What Is the Post-Post-Davos Model of the World?

Written on January 22, 2016 by Waya Quiviger in Global Economy

As the masters of the universe gather for the annual World Economic Forum in the Swiss ski resort of Davos, the world economy that they will be gazing down upon isn’t looking very healthy.

As the masters of the universe (and many journalists, too) gather for their annual confab in the Swiss ski resort of Davos, the world economy that they will be gazing down upon isn’t looking very healthy. The financial markets are in turmoil. The oil price is in a free fall. China just announced its lowest G.D.P. growth rate in a quarter of a century. The European Union has been in crisis for years. The Middle East . . . enough said. Even the American economy, one of the world’s few bright spots, is showing some signs of slowing down.

What to think? The optimistic view, which is always well represented in Davos, is that the response to the market gyrations has been overdone. In a blog post earlier this week, Olivier Blanchard, a former chief economist of the International Monetary Fund, pointed out that exports to China make up less than two per cent of U.S. G.D.P., so even a serious slowdown in China shouldn’t be a big drag on the American economy. And lower oil prices should be good news for advanced economies, because that leaves their consumers with more money to spend on other stuff. Read more…

Published in the New Yorker on Jan. 19

John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics, economics, and more, for newyorker.com.

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