TWO groups seem to be staring at each other in mutual incomprehension at the moment; investors and economists. Judging by the behaviour of stockmarkets so far this year, the former are very worried about the global outlook. But the latter think investors are panicking for no good reason.
Market movements (and much commentary) suggest that the big concerns are the Chinese economy (and its effect on global output), and the possibility that the Federal Reserve might have tightened monetary policy too soon, given the recent weakish figures on the American economy. But economists believe that China, whole slowing, is hardly collapsing and that falling oil prices are generally a positive, rather than a negative, sign.
Take Olivier Blanchard, the former IMF chief economist who just published his first blog for the Peterson Institute. Having examined the Chinese and US economic outlooks, he thinks it is hard to justify the market movements. So what explains the market movements? (http://ift.tt/1OXVVXx) He...Continue reading
Source: Business and finance http://ift.tt/1JW5kyz
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