These are puzzling times. Seven years after the financial crisis brought world output to a standstill, economists can't agree on why the recovery is still so meager, let alone what to do about it.
The International Monetary Fund in October cut its global growth forecast and began its semiannual report on the economic outlook with a simple lament: “A return to robust and synchronized global expansion remains elusive.” The IMF estimates that global gross domestic product expanded 3.1 percent in 2015. That’s the worst performance since the Great Recession in 2009, and the trend is the wrong way. The fund’s economists were predicting 3.8 percent growth for 2015 when outlook stories were being written a year ago. Now, they see 3.6 percent growth in 2016, and that’s down from a July forecast of 3.8 percent. Economists surveyed by Bloomberg expect the global economy to expand just 3.4 percent in the coming year. Elusive indeed.