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Thursday, March 25, 2010

RSG World Economic Brief - March 2010

Dr. Douglas O. Walker
Robertson School of Government

The RSG World Economic Brief for March focuses on unemployment among the more economically advanced countries that are members of the Organization for Economic Co-operation and Development, some important developments in China and Brazil, and the continuing problems surrounding Greece's unsustainable national debt. The Brief points out:

  • Unemployment in North America, Europe and Japan and Australia rose greatly with the onset of the Global Financial Crisis and little progress towards its reduction can be seen to date. Unemployment in the United States is particularly high both in terms of its historical level and in relation to other more developed countries.

  • Reflecting a global economy that continues to gain momentum, growth in China and Brazil is reported to be strengthening. International trade is also recovering, which should add some impetus to world growth; however, import and export growth has been much more rapid in the developing countries than in other groups.

  • Finally, the Brief looks at the financial crisis that has engulfed Greece and the European Union. The value of the Euro has been negatively affected by the crisis in Greece and similar but not yet critical problems in other Euro nations such as Spain and Portugal. The Brief poses some questions about the situation in Greece and their implications for policy in a situation when a country has a large external debt and does not control its own currency. Students are urged to ask themselves these questions, think about them, and discuss them with the Brief’s editor, Mr. Frederick Poorbaugh, teaching assistant for the economics courses, during his office hours from 2 to 4 pm on Thursdays in the Political Caucus Room on the third floor of Robertson Hall. Distance students may contact Erick by e-mail at and by phone during his office hours at 757-352-4723.
As noted in February's brief, the world economy appears to be recovering from one of its deepest downturns in decades. But employment remains very high and little or no progress has been made toward its reduction. Moreover, an extremely serious problem of unsustainable debt now characterizes Greece and perhaps other countries in Europe. The fiscal deficit of the United States and other large, more developed countries is also unsustainable and adding to the pressures on world financial markets. While a recovery in world production and trade may be underway, the world economic situation remains precarious and the outlook for the world economy is highly uncertain.

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