US Resilience to China Slowdown Questioned in Fed Risk Study
- Scenario in 2019 Fed paper saw market turmoil boosting impact
- Paper highlighted 2015-16 China scare as a cautionary example
This article is for subscribers only.
China’s stumbling recovery this year has produced a string of reassurances that the impact on the US of even a sharp downturn in the world’s second-largest economy will prove limited.
Just last month, economists at Wells Fargo estimated that if China’s total output dropped by a cumulative 12.5% over three years, US growth would dip 0.2 percentage point in 2025. And Nobel laureate economist Paul Krugman recently concluded that, as to whether a debacle in China similar to the US crisis of 2008-09 would would “pretty clearly” not result in major global spillovers.