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The $18 Trillion Global Economic Boost If Everything Went Right

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What if everything started to go right in the world economy?

It’s a lot to ask. The 1.1 percent global growth of the first quarter was the weakest for an expansion since 1998, according to JPMorgan Chase & Co. Former U.S. Treasury Secretary Lawrence Summers’s “secular stagnation” warning is gaining traction and central banks are finding more and more reasons to keep monetary policy easy.

That’s nevertheless not stopping Simon Cox, Asia Pacific investment strategist at BNY Mellon Investment Management, from thinking that “preoccupation with pessimism would seem to leave a gap in the intellectual marketplace to ponder what might go right.”

So curious was he that he teamed up with the Economist Intelligence Unit to compute just what would happen if everything in the big economies of the U.S., Japan, China and India all took off at the same time. Together they account for almost half of global gross domestic product.

“If these four economies were to fire on all cylinders at the same time, it would lift growth and trade in the rest of the world, reverse the slide in commodity prices and underpin a further rally in global share prices,” Cox said in a report sent to clients this month.

Cox’s simulation assumes Japan manages to average growth of 2 percent for the rest of this decade, the U.S. 3 percent, China 7 percent and India 8 percent.

How to fix the global economy...

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