Is globalisation leading to unstable global economy?
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16/07/2008
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Economic Times (New Delhi)
Robert J Samuelson WASHINGTON WE'VE been having the wrong discussion about globalisation. For years, we've argued over whether this or that industry and its workers might suffer from imports and whether the social costs were worth the economic gains from foreign products, technologies and investments. By and large, the answer has been yes. But the harder questions, I think, lie elsewhere. Is an increasingly interconnected world economy basically stable? Or does it generate periodic crises that harm everyone and spawn international conflict? These questions go to the core of a great puzzle: the yawning gap between the US economy's actual performance (poor, but not horrific) and mass psychology (almost horrific). June's unemployment rate of 5.5%, though up from 4.4% in early 2007, barely exceeds the average since 1990 of 5.4%. Contrast that with consumer confidence, as measured by the Reuters-University of Michigan survey. It's at the lowest point since 1952 with two exceptions (April, May 1980). Granted, the present US economic slowdown