Global economies “must adjust” to survive, warns economist
There is a big question mark over the health of the world economy in 2011, according to an expert at London Business School.
Andrew Scott, Professor of Economics, has warned that global economies must adjust in a co-ordinated way or risk political and financial instability.
Professor Scott said the significant financial divergences across countries pose a serious risk to growth, with the next few years likely to show contrasting economic patterns across the globe, depending on whether nations are an emerging market or mature, and whether they are a creditor or debtor.
He explained that policy intervention over the last few years has helped drag the economy out of recession, with low interest rates and liquidity injections propping up the economy.
However, Professor Scott warned that the process has only just begun and the US and Europe must move towards lower levels of debt.