Economic sluggishness that is prevalent around the world outside of the United States is vexing financial markets and governments alike.
While the U.S. economy grew at a hefty 4.6 percent annual rate in the second quarter, the eurozone registered zero growth and Japan's economy contracted at a 7.1 percent rate.
That has helped push the S&P 500 stock index down 5.8 percent down from its Sept. 19 high. Meanwhile, U.S. crude oil prices have fallen to a two-year low, and the dollar soared to a six-year high against the yen and a two-year peak against the euro two weeks ago.
While the U.S. economy has been little affected so far, Federal Reserve officials have voiced concern that the damage will spread to our shores.
And that could push the Fed to delay an increase in interest rates.
"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to [start lifting rates] more slowly than otherwise," Fed Vice Chairman Stanley Fischer said during IMF meetings last weekend,
The Wall Street Journal reports.
Most economists expect the Fed to raise rates around mid-2015.
So what's behind the global economic stagnation?
Washington Post columnist Robert Samuelson cites three important factors.
• "One is the hangover from the 2008-2009 financial crisis," he writes. "Sobered and scared, people and businesses delay consumption and investment."
• Second is "the legacy of global trade imbalances in the 1990s and early 2000s, when China and some other countries ran huge surpluses and the United States and some others ran huge deficits," Samuelson writes.
• Third is "the cost of maturing welfare states," he says. That applies to the United States, Europe and Japan.
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