Programmed failure of US and Chinese economic stimulus plans: The 'absorption capacity barrier'

- Excerpt GEAB N°35 (May 16, 2009) -

Programmed failure of US and Chinese economic stimulus plans: The 'absorption capacity barrier'

Despite impressive budgets, the two largest economic stimulus plans to date - those initiated by the governments of the United States and the People's Republic of China - are doomed to fail or at best to slightly soften the worst consequences of the current crisis. Beyond the very different characteristics of these two plans and economies, LEAP/E2020 anticipates that, in the next few months, their implementation will face an insurmountable obstacle in the short term, the “absorption capacity barrierâ€