Thursday, March 24, 2011

What does this mean?

Posted by Gavyn Davies on the Financial Times Blog March 23

The red lines show the growth rate of the emerging economies, on an annual basis and on trend. The forecasts are from the IMF. The strengthening in emerging market growth since the late 1990s is very pronounced, and is exactly what everyone would expect. The blue lines show the GDP performance of the developed economies. Not only have the growth rates of the developed world fallen relative to the emerging countries since the late 1990s, they have actually fallen in absolute terms as well.
Of course, a large part of the decline in western growth has been due to the collapse of the financial sector in 2008. But I am beginning to wonder whether the rise in the red lines, and the fall in the blue lines, are somehow connected. If so, it is going to cause a lot of trouble. Article here

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