Another depressed cheerleader

I am struggling to find a term to describe the angst-ridden mindset of even the most pro-capitalist economists nowadays (see 1 August post). Cheerless cheerleaders? Demand depressives? Moody mentalists? None of these quite captures it. Any ideas please email me.

In the meantime here is a contribution from Willem Buiter, a professor at the London School of Economics and former member of the Bank of England’s monetary policy committee, from today’s Financial Times:

“Once the cyclical correction in emerging markets has run its course, I expect growth in those countries to resume at rates that are high but no longer stratospheric. The reason is the environmental constraints on growth in these markets. I am not referring to the (massive) contribution of China and others to global warming, but to the local and regional environmental fall-out from unsustainable industrial and agricultural development: increasing scarcity and rising costs of clean fresh water, clean air and soil that is fit for humans. When the last athlete hobbles out of the polluted Olympic Games of Beijing, black-lunged and gasping for oxygen, there is likely to be a reassessment of what is sustainable growth in China. Even totalitarian regimes require, if not the consent, at least the acquiescence of the populace. Double-digit rates of growth are a thing of the past.”

His article concludes:

“So how bad will things get? After the slowdown/recession has corrected the excesses of the past decade, prospects for the overdeveloped part of the world are quite reasonable, as long as material aspirations moderate in line with modest prospects for sustained growth in standards of living. For emerging and developing countries at the right end of the commodity boom, the potential for prosperity is there, as long as the resource curse is avoided. For poorer countries at the wrong end of the commodity boom, the combination of the terms-of-trade shock and acute environmental challenge will make life very difficult.”

I was particularly struck by the reference to the “overdeveloped” parts of the world.

Pass the prozac!