Nobel Laureate and NYU Stern Professor Michael Spence writes about the prospects for an improving world economy for 2013. Professor Spence, a Distinguished Fellow at the Council on Foreign Relations notes that:
On the whole, the global economy, while not yet free of downside risk, appears set for a year of transition to better-balanced economic growth, albeit with lagging employment and income inequality continuing to hamper a robust recovery.
Professor Spence writes that the US’s economic situation appears marginally brighter and shows signs of sustainable growth, although lagging employment will still be an issue. As for Europe, reforms in Italy and Spain, in addition to the ECB’s commitment to stabilizing banking sectors, have reduced systemic downside risk. Other emerging economies such as China, with its successful political transition, appear to have reduced their system risk. Read more.