The idea that we live in an increasingly interconnected and turbulent world is something of a cliché -- yet true and important nevertheless. Decisions made by the U.S. Federal Reserve affect the purchasing power of villagers in southern Thailand; consumer demand in Europe and North America affects the output of factory workers in eastern China, which affects the jobs of oil workers in Brazil, Russia, and elsewhere. Elite investors now routinely send their capital abroad in a ceaseless quest for new opportunities and high returns; whether they realize it or not, hundreds of millions of less highflying people do the same indirectly, through their mutual or pension funds. So global economic forecasting -- trying to look past current events to glimpse what’s coming over the horizon -- has become an exercise of general, not specialized, concern.
A decade ago, the big story in the international economy was the so-called rise of the rest: the impressive growth of dozens of emerging markets around the globe. Poverty rates plummeted, the middle class exploded, and forecasters began talking of a great convergence, in which broad swaths of the developing world would catch up to the developed one. Then, the global financial crisis hit like a tidal wave, dousing almost everyone and redrawing the landscape. In its wake, many of the once-hot emerging markets have cooled. The BRICs are crumbling. China’s three-decade run of phenomenal growth seems to be ending, with the big question now being whether its landing will be hard or soft. And half a decade after the crisis began, Europe is still floundering. But not all the news is bad. The United States has surprised skeptics by making a slow but steady recovery, led by energy and manufacturing. And a whole new crop of green shoots is springing up.
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