- The Washington Times - Friday, January 31, 2003

WASHINGTON, Jan. 31 (UPI) — Globalization may have its foes, but it remains the most effective means to ensure growth worldwide, according to some top economists.

The finding was not surprising, particularly given that the International Monetary Fund had hosted the two-day forum on the global economy.

"It's important to know how issues link that spur growth" to assess what particular factors could further boost the global economy, said Randy Korszner of the White House Council of Economic Advisers, adding that diversity and the subsequent increase in investor choices enhances expansion prospects.

Certainly, the global economy has become ever more closely intertwined, especially amongst industrial countries, with the rise and fall of the fortunes of one country readily affecting the progress of another. But even emerging countries are increasingly susceptible to the fortunes of developed nations, particularly with the steady rise of foreign investment directly affecting their progress, said the IMF's head of financial studies division, Ashoka Mody.

The problem, however, is that precisely because national economies are so closely interlinked, countries are also more likely to be affected by a financial crisis in another, Mody added. In addition, there is the problem of identifying the plethora of factors affecting economic growth, and how one issue could influence another.

At the same time, there is concern about an disproportionate amount of influence U.S. policy has over the global economy, a fact acknowledged by the Federal Reserve's director of monetary affairs, Vincent Reinhart. Yet, he also pointed out that the U.S. economy, too, in turn was being increasingly influenced by overseas factors.

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