Humming the happy music in Davos
The great thing about Swiss hospitality — if you can afford it — is that the worse the weather, the warmer and cozier the welcome.
And so it was in Davos this year. An icy blizzard blew across the Alps but inside the World Economic Forum conference center, delegates were suffused with an unusually warm glow. Many economists said that they were pleased and relieved that some of the world’s worst economic fears were not realized in 2013.
“We didn’t go off the fiscal cliff in the U.S.,” said Nariman Behravesh of the economic research firm IHS Global Insight. “The eurozone didn’t have a meltdown. Greece didn’t leave. China didn’t have a hard landing.”
Many here say that it was the most upbeat economic gathering in the Swiss ski resort since the financial crisis began in 2007. Newspaper columnist Gideon Rachman, of the Financial Times, says there was a lot of optimism about the United States and about its ability to sort out its fiscal problems, particularly due to the changing economies of global energy production.
“The shale gas revolution has really changed the atmosphere and given people the sense that there’s a big, positive development going America’s way,” said Rachman.
But at least one of the delegates at the World Economic Forum was urging caution and forecasting trouble. Barry Eichengreen, an economics professor at the University of California, Berkeley, said that the mood of financial markets is a highly changeable one.
“They can move from being overly pessimistic about the eurozone and the world economy like they were at the beginning of last year to being too optimistic now,” he said.
Eichengreen predicts that in spite of the glowing confidence expressed at this year’s forum Europe’s debt crisis could erupt again this year.
According to Eichengreen, “The weather in Davos can change very quickly from blue sky to snow.”
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