Arnold Kling

Still Dragging

Arnold Kling, Great Questions of Economics
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The world's economic outlook is still sluggish, according to the World Bank.

The United States will lead the way, expanding 2.3 percent this year and 2.6 percent in 2003. Japan will not grow at all in 2002 and will be able to muster only 0.8 percent growth next year.

The 12-nation euro area will not fare much better, expanding only 0.8 percent this year and growing 1.8 percent in 2003.

It seems that for most of the past fifteen years, "The United States will lead the way" has been the situation. Europe and Japan seem to be a perpetual drag on the world economy.

Discussion Question. If the United States always is the leader in economic activity, how will our trade balance ever get out of the hole?

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