John Ydstie

Most election prediction models that try to forecast who's going to win the presidency take into account some measure of how the economy is doing. That's because generally if it's going strong in the six months or so before the election, history suggests the party currently in the White House will win. If the economy stinks, the party not in the White House takes over.

But, what if the economy is just so-so like it is now?

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

ROBERT SIEGEL, HOST:

The outlook for global economic growth got downgraded yet again, this time by economists with the International Monetary Fund's economists. In January, they thought the global economy would grow 3.4 percent this year, but they ratcheted that down to 3.2 percent in the latest version of their World Economic Outlook.

U.S. growth for 2016 got trimmed by the same amount in the report released Tuesday, down to 2.4 percent.

So what's going on? Here are five key factors from the WEO.

The revelations in the Panama Papers have generated anger and disgust. Politicians and leaders in countries from Russia to Iceland to the oil-rich Gulf States are implicated.

The irony is that while the shady world of shell corporations and offshore accounts is still massive — costing governments hundreds of billions of dollars a year — the global community has made significant strides toward reining it in.

In the past, falling oil prices have given a boost to the world economy, but recent forecasts for global growth have been ratcheted down, even as oil prices sink lower and lower. Does that mean the link between lower oil prices and growth has weakened?

Jason Bordoff, head of the Center on Global Energy Policy at Columbia University, says there are still good reasons to believe cheap oil should heat up the world economy.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

LINDA WERTHEIMER, HOST:

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

Transcript

ARI SHAPIRO, HOST:

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

Transcript

ARI SHAPIRO, HOST:

A reality check today from Federal Reserve Chair Janet Yellen. She acknowledged that the U.S. economy is facing a higher level of risk than just a few months ago. NPR's John Ydstie reports.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

RENEE MONTAGNE, HOST:

As the old saying goes, the stock market has predicted nine of the last five recessions. In other words, sharply falling stock markets are crying wolf about half the time.

Dyke Messinger, who runs a small manufacturing company in Salisbury, N.C., thinks stock investors have been overreacting during this sell-off.

"It is bizarre to me when we see what we believe is good core strength in the U.S. market," he says.

Pages