The global economy has seen a surge in international trade, thanks to the internet. This has allowed businesses to reach customers around the world and stabilized the economy by making it less dependent on interest rates, as noted by Mr. Kelly. However, while some see this as a positive development, others are more cautious about the state of the economy.
Professor Thomas Herndon from John Jay College of the City University of New York believes that while big businesses may try to maintain full employment through restrictive economic policies, this is not a long-term solution for avoiding recessions. He also pointed out that old-fashioned financial bubbles and credit cycles still pose a threat to the economy.
James Knightley, chief international economist at ING, stated that eliminating economic cycles would be the ultimate goal of central banking but remains a challenge. He also mentioned how central banks have been using innovative tools such as lending facilities to maintain credit flow and stabilize bank balance sheets as a way to reduce the risk of a downturn. Despite these efforts, many economists remain concerned about the future of the global economy and its ability to withstand another recession.
