U.S., Japan and the Global Perspective
Econoclast Special Report
The global economic growth perspective as well as the inflation outlook over the next few years is constructive for additional earnings growth and equity gains. Emerging market economies should have the lion’s share of the gains...
U.S., Japan and the Global Perspective
By MIKE COSGROVE - Econoclast
The global economic expansion can be expected to run for several years with global growth averaging 3.5%. In comparison, U.S. growth may be a paltry 2% per quarter, on average, over the next four quarters.
Global economic growth is constructive for equities. The Fed is on hold until next year as inflation concerns have melted away. Fiscal policy -- tax, regulatory and spending activities – are, on balance, unfriendly to business formation, capital creation, job growth and equity prices as the policy mix likely dampens the extent the U.S. is able to participate in the global expansion.
The present value of the higher taxes embedded in the Federal deficit and the Patient Protection and Affordable Care Act has the effect of reducing the disposable income of U.S. taxpayers, resulting in sub-par U.S. economic growth. But the base case is slow growth and no double dip.
Click on the PDF link (right) to view the September Trends report.
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Mike Cosgrove (principal at Econoclast, a Dallas-based capital markets firm) is a professor at the University of Dallas. His research involves monetary and tax policies and their relationship to inflation and economic growth. His Ph.D. is from Ohio State University. *Reproduced with permission.
SEPTEMBER TRENDS REPORT
The Econoclast examines trends, scenarios and implications for the economy and the markets.