NEW HAVEN—Concerns over global growth were at the top of the agenda for the just concluded G-20 meeting in Shanghai—and with good reason. Seven years after the Great Recession, the world economy continues to struggle.
After a wrenching financial crisis morphed quickly into a severe downturn in the global business cycle, the subsequent recovery has been unusually weak, lacking the vigor that normally insulates the world from subsequent shocks. With a multitude of shocks continuing to batter today’s troubled world—from ISIS and a European refugee crisis to a collapse in energy and other commodity markets—the probability of a relapse remains high.
To a large extent, the world is mired in a Japanese-like secular stagnation.
