An economic consensus: more sluggishness before an upturn
The world economy is in for at least several more quarters of economic sluggishness before a recovery begins, say several US economists. And while key economists disagree about when the improvement will come, they do agree that the United States will be the laggard in the economic comeback.
Japan's economy experienced only a mild slump and will begin picking up steam while France, which has been at the forefront of Western European economies, will begin paying the price for its policies in 1982 and 1983, economists in the US predict.
Generally, the forecasters are optimistic about the international outlook. In Western Europe, a ''moderate'' recovery is in the making and will surface more fully during 1982's first half, says Werner Chilton, vice-president in the international economics department at Citibank of New York.
''The fourth quarter is very iffy at this point. It could be some improvement already is under way but we have problems knowing just where we are, and that makes it hard to tell where we're going to go,'' he says.
Japan has been spared recession and has only been hit by a slowdown from more normal levels of economic growth. ''In terms of former Japanese standards going back to the early 1970s, the growth may not be all that vigorous now, but compared with other countries it is,'' says Mr. Chilton.
Dr. Robert Davis, vice-president and economist at Harris Bank in Chicago, expects the worldwide economy in 1982 to look ''much better'' than in 1981 and 1980. ''But that doesn't mean a booming recovery,'' he cautions. ''It's going to be a slow recovery.''
Countries in the industrial West will have to climb back from declines posted over the past six months to a year. ''So some time in the first half of 1982 countries that have had more moderate declines, such as West Germany, will have regained the peak from which they started to decline,'' he says. ''Countries like the United Kingdom may regain their peak by the end of 1982 or early 1983 .''
Still, by the time the figures for 1981 come in, he expects all industrial countries - except the US - will have shown ''a positive and increasingly growth situation. It's just not going to be dramatic or an extremely strong rebound,'' says Dr. Davis.
James Solloway, senior economist at Argus Research Corporation in New York, doesn't see resumption of ''acceptable growth'' in the international economy until the beginning of 1982 ''at the earliest. The US and French economies may be the two that lead any general world recovery,'' he believes, a stand at odds with other economists.
He points to the ''general convergence'' of policies among nations, at least in terms of monetary policy. ''Almost every major industrialized country is following a very tight monetary policy which, to a greater or lesser extent, is clashing very badly with (its) fiscal policy.
''Certainly the US is an example and so is Britain,'' says Mr. Solloway. ''France is even more of an example with a rather tight monetary policy causing interest rates to go to record or near record levels and stay there.''
''Globally speaking, major governments themselves are now widely in recession because of revenue and expenditure limitations,'' adds Walter Hoadley, senior research fellow at the Hoover Institution in Palo Alto, Calif., and former executive vice-president and chief economist of Bank of America.
Mr. Hoadley says the global gross national product will increase about 2 percent this year and 2.5 percent in 1982, in real terms. Inflation will remain chronic and widespread, dropping from about 14 percent to 12 percent on a worldwide basis between 1981 and 1982, with regional differences continuing to be substantial, he told a recent business outlook meeting. There will be ''some improvement'' later in 1982 and ''more definitely'' in 1983.
''No surge in the world economy is in the offing in 1981-82 to lift the US economy and solve America's problems,'' notes Mr. Hoadley. ''Indeed, the opposite is true because the world at large is waiting for a new surge of economic expansion in the US and a moderation of its high interest rate, strong dollar, dampening impact on other countries.''
''I'm an optimist,'' shrugs Prof. George Stigler of the economics department at the University of Chicago. ''I'm not trying to find another planet to move to.'' He expects the global economy to rebound, but the US economy, will be sluggish for a year or two.
''But on the other hand, after that I believe it will be very buoyant and strong for some years. I can't offer precise dates and I don't think anyone else can either,'' he declares. If the industrialized nations could reduce their rates of inflation, they would see lower interest rates, ''even though rates won't fall back to 3 percent.'' The ''fundamental task'' is improving sluggish productivity.
At the close of President Carter's administration there was a rather strong global consensus the US was ''over the hill,'' past its prime in power and prestige. Some economists believe the Reagan administration's policies and actions are bringing new life to that image.