Krugman’s depressing the hell out of the folks over at the World Business Forum. Kelly Evans, WSJ:
1 – Based on GDP, “the recession is over, we’re back to a world of growth”
2 – But, “the jobs picture is continuing to deteriorate. The recession may be over, but the bad times are nowhere near over.”
3 – “This could be bad. Financial crises tend to produce prolonged hits to growth…and this is the mother of all synchronised financial crises so we almost certainly have a long, long slog before we’re fully recovered.”
Then, he turned to the topic of world trade. And the picture he painted was not a pretty one.
“When it comes to international trade, actually it’s not the Great Depression, it’s worse,” he said, presenting charts showing the decline in global trade activity falling much more steeply in the current downturn than during the Depression.
“The scale of the collapse of world trade has been so large that it has produced a degree of international linkage that surpasses what even the pessimists imagined,” he said. “World trade acted as a transmission mechanism,” spreading economic distress “even to those countries that had relatively healthy financial systems,” such as Germany.
“We really are one world economy in a way that has never been true before,” he said.
We haven’t looked at the trade figures for a while, but here’s what world GDP trends looked like six months ago, before the rebound: