The Global Economy Looks Good for 2018 (Unless Somebody Does Something Dumb)

Everyone in the world—plus the two SpaceX customers who technically won’t be in the world when they do figure eights around the Earth and the moon for two weeks this coming year—can look forward to another year of healthy growth in 2018. We’ve gotten so used to complaining about sluggishness that it’s a shock to realize the global economy has quietly accelerated to a respectable and sustainable cruising speed. Market volatility is historically low. Even the skeptical Germans sound happy. “The data we get and the indicators we see are very positive,” says Clemens Fuest, president of the IFO Institute at the University of Munich. “There is no obvious obstacle.”

The big story for 2018 is likely to be how to manage the continued expansion. A turning point may come at the end of September, when the European Central Bank might stop or curtail monthly bond purchases. The central banks bought bonds to drive down long-term interest rates; while the Japanese will keep buying, the Americans and soon the Europeans are betting that the patient, the economy, is finally well enough to get along without life support.