Author Archives: jfrankel

The Global Economy as of End-2022

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December 24, 2022 — Economists spent most of 2022 convincing themselves that the global economy was about to fall into recession, if it wasn’t already in one.  With the year over, the global recession has now been postponed to 2023.

  1. Tour d’horizon

In the US, reports that a recession had begun in the first half of the year clearly were premature, especially given how tight the labor market was.  It still is. The chances of a downturn in the coming year are well below 100%, despite the confidence with which many say it is certain.  It is foolish to think we can predict a recession with certainty. But the chances are indeed far above the usual 15 %.  I would put the odds at perhaps 50-50 in 2023 and 75% at some point during the next two years.  The main reason is the rapid raising of interest rates by the Fed (and other central banks), of course, which in turn is attributable to high inflation. read more

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Let the WTO Referee Carbon Border Tariffs

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December 2, 2022 — The most important task in confronting global climate change is the need to enforce serious quantitative limits on Greenhouse Gas emissions, such as the Nationally Defined Contributions which were originally negotiated in the 2015 Paris Agreement.  The 27th Conference of Parties to the UNFCCC,  which concluded in Sharm-el-Sheikh November 20, did not tackle this task.  Carbon border equalization measures, including tariffs against carbon-intensive imports from lax countries, might supply the teeth that have been missing from such agreements.  But they also risk advancing protectionism, which would ultimately slow the needed global energy transition.  Adjudicating the fairness of carbon tariffs would be a good job for a reinvigorated WTO. read more

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Turkey’s inflation mostly results from its own policies

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November 25, 2022 — The following interview appears today in Ekonomi Gazetesi (in Turkish), Elif Karaca.

1)   How do you see the state of the global economy in 2023?  What about its reflections on Turkey?

JF: Contrary to most of what one hears, it is not certain that the world will go into recession in 2023, nor that the US will.  But the risk of a recession is certainly greater than usual, or at least a global slowdown, due mostly to the increases in interest rates that most central banks are finding necessary in response to high inflation.  Higher global interest rates and slowing growth of course make things more difficult for Turkey, as do the high oil prices that resulted from the Russian invasion of Ukraine. read more

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