Should we be concerned about the state of the world economy? Yes: it always makes sense to be concerned. That does not mean something is sure to go badly wrong in the near future. On the contrary, the world economy seems to be heading into just a mild cyclical slowdown. Far more important is the adverse longer-term structural and cyclical context because it makes any short-term swing far more perilous. According to Goldman Sachs, the momentum of global economic growth slowed markedly in 2018. The most globally significant slowdown has been in the Chinese economy— the main engine of global growth since the financial crisis of 2007-08. But Germany and Japan also recorded economic contractions in the third quarter of 2018. Stock markets have also been in turmoil. In part, that presumably reflects worsening perceptions of prospects. These falling markets should also weaken consumption and investment. All this suggests a cyclical slowdown is on the way. Yet conventional forecasters are h...

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