The best hope for the global economy in 2017 also happens to be its biggest threat: Donald Trump. This apparent contradiction is reflected in the disparate reactions to the celebrity real-estate investor’s election victory.
The financial markets love Mr. Trump. Since he became the U.S. president-elect in November, the Dow Jones stock index has risen by 9 percent, creating $260 billion (€245.6 billion) in wealth on the stock exchange.
“If Trump follows through on his promises for massive tax cuts and infrastructure investment, it would provide a large, temporary boost for the U.S. economy,” said Clemens Fuest, head of the German economic research institute Ifo.
This kind of stimulation, so the optimistic theory goes, could have a positive effect on Europe and the rest of the global economy. After all, the United States is still the planet’s biggest economic powerhouse, and both Europe’s and China’s most important export market.
But at the same time, leading economists around the world are warning against the enormous risks a Trump presidency could pose for the global economy.