Th global economy's outlook: as if the 24 months since the summer of 2009 have flown by in one minute. Not much changed.
The future of the global economy is as uncertain as it was 2 years ago. (Would any self-respecting macro analyst dare to stand by a mid-term forecast of global GDP, oil prices, or even policy stance?) We still lack any coherent global institutional framework that could offer even a remote chance to project a credible global economic policy. Hence there is still no anchor that could fill the credibility void. To top it, the policy toolbox seems as inadequate as ever. True, there has been some policy innovation (though, much of it was more renaming of old -- and banned -- policies than real novelty), but those are running out as well. Can you imagine a QE3 which is more than mere verbal intervention?
We thought -- foolishly it seems -- that the crisis that would eventually force the rise of meaningful global institutions could be postponed by a decade. Maybe the delay will turn out to be measured in months.
Links to the empty toolbox, and global macro uncertainty.