Is 2008 a year of reckoning for the global economy? With a severe housing downturn, constricted credit markets straining the U.S. economy and banks writing off billions of dollars in losses, the impact has been felt worldwide. Whether the end result is a recession or a reordering of the global economy, policy-makers in all countries—developing, emerging market and industrialized—have to deal with the fallout. As economies benefit from globalization, gone are the days of isolated economic events. How will the current turbulence affect the global economy as 2008 unfolds?
On January 31, the Brookings Institution and the International Monetary Fund (IMF) hosted a presentation of the IMF’s latest World Economic Outlook (WEO) Update. Economic Counselor of the IMF and Director of the Research Department Simon Johnson presented the report’s findings. The WEO contains the IMF’s updated forecast for 2008 and analyzes recent global economic developments.