Project Syndicate: Are we out of ammunition to fight the next recession?

STANFORD, Calif. (Project Syndicate) — Economic forecasts for 2017 project continued frailty in the global economy, and subpar growth for most countries and regions.

Obvious economic problems include Europe’s weak banks, China’s distorted property market, political uncertainty in the West, historically high private and public debt — 225% of gross domestic product, according to the International Monetary Fund — and the reluctance of heavily indebted Greece and Portugal to comply with IMF programs.

Additional global economic risks, such as a major oil-market disruption that could drive prices up, are not as obvious, and thus receive less attention. Economists call such events “shocks” precisely because they come unexpectedly and can have far-reaching consequences.

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