What are biggest risks to the global economy in 2019? | Kenneth Rogoff

From China to Europe and beyond it is likely to be a
nerve-racking year

As Mark Twain never
said
, “It ain’t what you don’t know that gets you into
trouble. It’s what you think you know for sure that just ain’t
so.” Over the course of this year and next, the biggest economic
risks will emerge in those areas where investors think recent
patterns are unlikely to change. They will include a growth
recession in China, a rise in global long-term real interest rates
and a crescendo of populist economic policies that undermine the
credibility of central bank independence, resulting in higher
interest rates on “safe” advanced-country government bonds.

A significant Chinese slowdown may already be unfolding. The US
president Donald Trump’s trade war has shaken confidence but this
is only a downward shove to an economy that was already slowing as
it makes the transition from export- and investment-led growth to
more sustainable domestic consumption-led growth. How much the
Chinese economy will slow is an open question; but, given the
inherent contradiction between an ever-more centralised Party-led
political system and the need for a more decentralised consumer-led
economic system, long-term growth could fall quite
dramatically.

Source: FS – All-News2-Economy
What are biggest risks to the global economy in 2019? | Kenneth Rogoff