Under pressure from Donald Trump’s tariffs, China might be tempted to try to stimulate aggregate demand using short-term measures, much as it did after the 2008 global economic crisis. A better strategy, however, would be to focus on structural reforms.
NEW YORK – This year marks a decade since the global financial crisis erupted. For the United States, 2018 is very different from 2008. The economy has gone from the brink of collapse to the brink of overheating, thanks to a massive tax cut enacted when growth was already robust. The attitude toward China has also changed dramatically. Recognition that cooperation with China was necessary to manage global demand has given way to protectionism and hostility.
NEW YORK – This year marks a decade since the global financial crisis erupted. For the United States, 2018 is very different from 2008. The economy has gone from the brink of collapse to the brink of overheating, thanks to a massive tax cut enacted when growth was already robust. The attitude toward China has also changed dramatically. Recognition that cooperation with China was necessary to manage global demand has given way to protectionism and hostility.