In the spirit of a new year, I'll briefly paint out what I see coming for 2008. There will be various shocks. Many trees will be felled with the words of many commentators. The more modest among us will restrain ourselves to wasting electrons. Regardless of what prophecies of doom unfold, the world economy will prove, as always, to be an amazingly flexible beast and manage to hang together in one piece. Happy?
Let's remember that world GDP growth in 2007 was approaching 5%. How much does the ABCP fallout and gas prices matter when humanity is doubling its ability to produce every fifteen years? (Yes, I realize there are a number of problems in using GDP. Do we have a better measurement? No, I don't think so.)
I remain eternally optimistic about the magnificence of human economic behaviour.
EDIT: I realize there are some concerns about that 5% looking statistically indistinguishable from zero after accounting for population growth (and arguably environmental degradation, among a host of other factors), but I subscribe to a belief that net GDP increase is a good thing, even if per capita GDP is constant. This stems from certain tidbits about spillovers - a larger economy should be able to produce more innovations, which are nonrival, and thus foretell higher future rates of per-capita growth than a smaller economy with identical present per-capita growth.