Not alone.

Author:Bergsten, C. Fred
Position:Letter to the editor

To the Editor:

In his courageous article in the Fall 2015 issue ("Gathering Storm II"), Philip Verleger recalled his accurate prediction of the last big upward spike in oil prices in a book that I and a dozen colleagues at the Peterson Institute published in early 2005 (The United States and the World Economy: Foreign Economic Policy for the Next Decade). Verleger erred badly, however, in suggesting that his was the only correct forecast in that volume ("one out of five").

We warned of the growing backlash against globalization that has in fact led to a sharp slowdown in world trade growth, the collapse of the Doha Round, a prolonged delay in implementing the three most recent U.S. trade agreements, and currently great uncertainty over Congressional approval of the Trans-Pacific Partnership. We accurately foresaw the sharp rise in global imbalances, including the U.S. current account deficit to record levels, and the currency manipulation that helped produce them, which in turn played an important role in bringing on the Great Recession as testified by both Ben Bernanke and Alan Greenspan. We rejected a hard landing for China but projected a possible sharp slowdown, which is now so evident and so worrisome. Along with with Verleger's increases in energy prices, all this combined to produce the somber...

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