RECENT indicators out of Washington, Europe, and Asia suggest it's time for some fresh thinking. For the moment, economic conditions on both sides of the Atlantic look good. The current recovery is now one of the longest on record. Stock markets, in the US and elsewhere, continue to post gains. No sharp downturn or recession appears to be on the horizon.
But it is also evident that the global economy has entered a period of weak growth, if not stagnation. Slow growth by itself is not bad. It tends to provide a non-inflationary climate. But slow growth also works against job creation, since economies cannot absorb all those entering the labor force.
No matter how the statistics emanating out of most government offices are read, they spell two words: tepid growth.
Japan's growth rate is the slowest recorded in recent years. In Europe, despite a strong 1986, economists now anticipate a lackluster 1987. Last year's US growth rate was 2.5 percent, the slowest since the recession year of 1982. Most economists doubt that the giant American economy will break through the 3 percent mark this year, despite White House forecasts of 3.1 percent growth.
One key to the current lackluster setting is surely Europe. Last year the nations of the European Community posted a solid 2.5 percent growth rate, the best since 1979. Now, EEC projections anticipate growth for this year around 2.3 percent, down from the 2.8 to 3.0 percent growth many economists were forecasting.
What's happening in Europe is essentially twofold: Consumer spending has been helped by lower inflation - one result of lower energy costs. Oil prices are pegged to the value of the dollar, which has fallen sharply in past months. But on the other side of the coin, European industries - far more export linked than most US industries - are finding it more difficult to crack the US market because that same drop in the dollar's value makes their goods more expensive.
There are, not surprisingly, no easy solutions.
West Germany and Japan should follow through on promises to modestly expand their economies. The US and its allies must check any further downward decline in the dollar. Nations must avoid protectionist measures.
The most important step, however, is joint communication. The Western industrial nations and Japan should make sure that the diplomatic hotlines are kept open to their respective treasuries so that whatever joint actions are necessary to keep the recovery going are taken.