They had a negative scenario for all three if current troubles led the countries or regions to turn inward and protectionist.
The two scenarios with some positive results indicate that
US adjusts well if the US gets past the political problems that exist now.
In the United States, fears grew that its own debt situation could lead it down a similar path. A wave of public outrage at brinksmanship and blame-mongering in the US political system led to a new bipartisan drive for fiscal reforms. A mixture of deep spending cuts, adjustments to entitlement programmes and targeted tax increases succeeded in balancing the budget and gradually reducing US public debt. At the same time, US firms became increasingly active at chasing growth opportunities in new global consumer markets.
Europe has success if the monetary union is reformed.
As Europe’s leaders struggled to preserve the Eurozone in the early 2010 decade, they converged around the idea that only a fundamental redesign of the monetary union could ultimately bring stability. Arduous negotiations led to a multilateral accord establishing a European Finance Ministry with sweeping competences for fiscal and economic policies. The effort of establishing these new institutions while managing the subsequent political fallout that emerged in several key member states made European policy-makers largely disconnected from developments in the rest of the world. In spite of this, the economic outlook for Europe became increasingly optimistic as structural reforms in the periphery began to show signs of success.
China has success if it successfully rebalances and gets the yuan used in Asia and emerging markets.
In China, the 2010 and 2020 decades saw rising incomes and a fast-growing service sector. Fueled by an expansion of consumer credit, demand for imports gradually moved the Chinese current account from surplus to deficit. Gradual liberalization of the Chinese capital account unlocked new investment opportunities and helped establish Shanghai as an international financial centre. Together with the ongoing adjustments in the United States, the global imbalances that had caused such concern in previous years slowly unwound.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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