The U.S. Economy In 2017: Welcome Higher Growth

I am devoting my first article of the year to a forecast of the U.S. economy’s prospects given the world economic scene. So far they have been decently accurate, but none predicted major changes. This time is different. The promise of an important decrease in regulatory and tax burdens on U.S. businesses suggests that the U.S. economy will grow faster than most analysts expected. In addition, (and mostly due to internal rather than external factors), the U.S. economy will be a key driving force of other Western economies. Based on the flood of data showing a U.S. economy with many sectors increasingly strangled by regulations, my past forecasts have usually predicted mediocre performances. Most forecasts, like a recent one from the IMF World Economic Outlook, were predicting U.S. growth of just over 2% for 2017. Can the U.S. economy grow at much faster rates? Say, approaching 4%? It’s not impossible. To simplify my analysis of the world economies, I focus on the world’s top 10 economies, which represent two thirds of the global economy. In addition, I also devote time to analyzing Mexico and Canada, the U.S.’s main trading partners. The United States is still, by far the world’s largest economy.

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