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2009-08-10

Hope Frankel's rose assessment can stand time test

Commnets on Jeffrey Frankel “An evaluation of the first 200 days of Obama economics”, 10/08/2009, http://www.eastasiaforum.org/2009/08/10/an-evaluation-of-the-first-200-days-of-obama-economics/

This is a very rosy assessment, although it may well be correct.

Likely problems will emerge over time in the coming years. They are likely to be associated with the speed of the recovery over the next 2 to 5 years. Will it be another Japan's 1990s, if consumer spending and firm investment take a hit due to reduced assets and demand? Or will the US be shrug off that dilemma and this great recession would have been just a big scare? That remains to be seen.

Further, how will the anticipated consumer adjustment in terms of spending and saving affect the growth in the next few years? That is also likely to affect the growth scenario.

What about any further changes or shifts in international competitiveness, due to continued improvement in the competitiveness from big developing countries such as China and India?

So, it is too early to cast a sure judgement, yet. But I sincerely wish/hope Professor Jeffrey Frankel is correct in his early assessment, because that will be good for not only the US but also the whole world.

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