Good on us that the U.S. economy grew at an annual rate estimated at 3.7% in the April-May-June quarter rather than the 2.2% rate announced as the first estimate a month ago. But don’t get too excited. State and local government spending accounted for a higher-than-average share of the growth [continue reading . . . ]
One of the main problems with China’s economy is that it is geared too heavily to exports and infrastructure spending, too little to domestic consumption. You can see the contrast with the U.S. in the chart. American consumers are in the driver’s seat in the U.S. Household consumption in 2014 [continue reading . . . ]
So the Chinese routinely send to our shores boatload after boatload of relatively inexpensive stuff that helps fill up our box stores and helps keep U.S. inflation in check. We send back little pieces of paper that say “IOU.” The Chinese tend to invest their trade surplus in the safest [continue reading . . . ]
Two decades ago China’s economy was roughly a quarter the size of the U.S. economy. Today the economies are of roughly equal size, each producing about $17.5 trillion worth of goods and services based on an economic concept known as purchasing power parity (PPP). The concept discounts the effects of [continue reading . . . ]
The next recession: Made in China?
If you haven’t read it, get to your library (or use your library card) to read Ruchir Sharma’s op-ed in the Wall Street Journal August 17 (Page A 11). He argues that with advanced economies stuck in slow-growth mode, the globe is “one shock away from recession” and that the [continue reading . . . ]