Wells Capital Economist Jim Paulsen has been making some interesting comments about where he sees potential for GDP growth in coming years: the U.S. trade balance.
In its simplest terms, his thoughts are that the United States’ binge on cheap imports over the last few years has fueled the growth of a middle class in much of the emerging world, which will now be anxious to consume U.S. exports. Exports rising relative to imports will improve GDP growth to offset a slowdown in consumer spending.
That’s in line with what another savvy economist, Don Hayes, has been saying for years now: “The technology revolution produces a massive new flat world which ignites a spread of democracy which unleashes a huge sponge of new consumption which launches the greatest economic boom in the history of the world…”
With so much negative news out there, this is a scenario that is more fun to ponder.
Here is a link to an article in Barron’s about Jim Paulsen’s recent remarks.