The Global Delta, Part II
by Stephen Roach/Morgan Stanley
Despite an outpouring of China hype, today’s world economy is still very much dominated by the behemoths of the industrial world. In the first installment of this essay, I made the simple point that scale effects matter -- that one percentage of nominal GDP growth in either the US or the European economy was the functional equivalent of 7-8 times the dollar-based increment of one percentage point of Chinese growth and fully 18-19 times the increment generated by one percentage point of Indian growth (see my 13 January dispatch, “The Global Delta”). That’s the state of play today. But what about the future? How quickly is this disparity in global growth contributions likely to change in the years ahead?
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