Word: growths
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Dates: during 1990-1999
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...fueled consumption and big current account deficits were "a sword of Damocles." Though that danger may not be immediate, Hormats noted, it is probably behind efforts by U.S. Treasury Secretary Robert Rubin and Deputy Secretary Lawrence Summers to push for Europe and Japan to do more for global economic growth: "I think they see this vulnerability coming down the road, and they want to head it off as much as they...
...board focused on the U.S. as the key engine of world growth. Many indicators are encouraging. The unemployment rate of 4.3% is the lowest in 28 years. Inflation is under 2% and shows no signs of heating up. The run-up in the stock market since 1994 has added an extra $10 trillion to the assets of American households. And Washington's success in finally reversing three decades of government deficits has opened up a new era of "surplus politics," says Robert Hormats, vice chairman of Goldman Sachs International, "which is a huge change in the nature of our economy...
...their soaring stock portfolios, to keep buying consumer goods on credit--the so-called "wealth effect." But a drop in the Dow Jones index or some other shock could quickly erase those paper gains and choke off the spending boom. So while the Clinton Administration is touting consumption-driven growth, Dresdner Bank's Ernst-Moritz Lipp is critical. "We shouldn't praise as an important development something that is due to an unsustainably low savings rate driven, in turn, by an asset-price bubble," he says...
Other panelists voiced doubts about Europe's prospects. Courtis argued that high taxes and overregulation are hobbling growth and locking in high unemployment (currently 10% to 12%). Courtis and Hormats also wondered if Europe was doing enough to import from emerging economies and the U.S., especially since the American trade imbalance is so dangerous...
...economists agreed, however, that finally, the outlook for Japan is up. From a 3% contraction of the economy in 1998, Japan is likely to claw back to zero in 1999, on the way to real growth in 2000. "After being pessimistic about Japan for four or five years," says Courtis, who is based there, "I would give their economic management an A." The government is finally priming the pump in earnest: $550 billion to recapitalize banks, $250 billion to stimulate domestic demand, and "I'll bet you see another $250 billion this year...