It was in September 2008 that the collapse of Lehman Brothers triggered an economic shock leading to a global recession. Since then, most countries have gradually recovered, and in recent years what came to be called a Great Moderation permeated the world's economies.
That market situation changed in 2018. Stock markets — which represent the current state and future of an economy — began to exhibit greater volatility. The volatility index of the Nikkei average on the Tokyo Stock Exchange has increased to nearly 25 from around 15 in mid-2017. A symbolic move of this volatility was the 4 to 6 percent plunge in share prices on the world's major stock exchanges in just one day from Oct. 10 to 11.
Which brings us to the question of what will be the state of the world economy as we head into 2019. Will the world and Japanese economies keep up a moderate recovery, or will they turn downward? In Japan, the consumption tax is scheduled to be raised in October. How the economy will weather the hike will be closely watched given that it went downhill when the consumption tax was last increased in 2014.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.