Can a divided G-7 stall a global downturn?
THE G-7, the rich man’s club of developed nations, stands divided over the policies needed to stall the deceleration in growth of the world economy. While there is not much disagreement over whether the United States and the rest of the world is likely to experience a significant economic slowdown, opinions differ on whether the observed slack in the system is a temporary correction and whether interest rate cuts are the best way to redress the problem. The source of the near-consensus on the direction in which the world economy is headed is clear. The U.S. economy, which is seen as having served as the locomotive of global growth through the 1990s, has been experiencing a sharp deceleration since the second half of 2000, after almost a decade of buoyancy. Profit warnings from New Economy firms and lay-off announcements from most-favoured corporates like Cisco Systems are now signalling a sharp fall in corporate investments in information technologyhardware that had sustained the earli
