Read: Martin Wolf: Risks that Threaten Global Growth

Should-Read: Martin Wolf: Risks that Threaten Global Growth: “Consistent growth is a relatively recent phenomenon…

…Global output shrank in a fifth of all years between 1900 and 1947. One of the policy achievements since the second world war has been to make growth more stable…. The world has avoided blunders on the scale of the two world wars and the Great Depression… active management of the monetary system, greater willingness to run fiscal deficits during recessions and the increased size of government spending relative to economic output. Behind the tendency towards economic growth lie two powerful forces: innovation at the frontier of the world economy, particularly in the US, and catch-up by laggard economies…. China… gross domestic product per head rose 23-fold between 1978 and 2015. Yet so poor had China been at the beginning of this colossal expansion that its average GDP per head was only a quarter of US levels in 2015. Indeed, it was only half that of Portugal. Catch-up growth remains possible for China. India has still greater room….

The overwhelming probability is that the world economy will grow… by more than 3 per cent…. [But] if we consider the possibility of globally significant financial crises, two possibilities stand out: the break-up of the eurozone and a crisis in China. Neither is inconceivable. Yet neither seems likely…. A third set of risks is geopolitical. Last year I referred to the possibility of Brexit and “election of a bellicose ignoramus” to the US presidency. Both have come to pass. The implications of the latter remain unknown. It is all too easy to list further geopolitical risk….

Catch-up still has great potential. But economic dynamism has declined in the core…. Mr Trump promises a resurgence of US trend growth. This is unlikely, particularly if he follows a protectionist course…