The consequences of a Trump shock

Washington

WITH the US presidential election on Nov 8, and a series of elections and other political decisions fast approaching in Europe, now is a good time to ask whether the global economy is in good enough shape to withstand another major negative shock. The answer, unfortunately, is that growth and employment around the world look fragile. A big adverse surprise - such as the election of Donald Trump in the United States - would likely cause the stock market to crash and plunge the world into recession.

There is always a great deal of insight in the International Monetary Fund's (IMF) semi-annual economic outlook, which is based on detailed data from around the world. And, because the latest version was published in early October, it is particularly relevant. (I was previously the IMF's chief economist and oversaw the forecasting process, but I left that position in August 2008.)