Stephen Roach warns on the potential for the coronavirus outbreak to shock the world in a recession
- Historically, the rapid expansion of cross-border trade has been an important part of the global growth cushion that shields the world economy from all-too-frequent shocks.
- Now, however, reflecting the unusually sharp post-crisis slowdown in global trade growth, this cushion has shrunk dramatically, to just 13% over the 2010-19 period. With the world economy operating dangerously close to stall speed, the confluence of ever-present shocks and a sharply diminished trade cushion raises serious questions about financial markets' increasingly optimistic view of global economic prospects.
There is more at Zero Hedge's piece on Roach here
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Who is Roach?
- a senior fellow at Yale University's Jackson Institute for Global Affairs
- a senior lecturer at Yale School of Management
- formerly chairman of Morgan Stanley Asia and chief economist at Morgan Stanley
