The global economy is performing well below its potential on growth and on distribution because of three mismatches: between aggregate demand and aggregate supply; between investment needs and investible funds; and between the promise and the pitfalls of technological change.
First, aggregate demand is deficient relative to aggregate supply. When looking at output gaps, as the IMF has done, the picture is one of persistent underperformance of the global economy, seen to be in the range of 1.5 per cent to 2 per cent of GDP more than five years after the Great Recession.
