Year-end is associated with an influx of views about next year. If you shop long enough you will surely find a forecast that matches your expectations, which will help you to justify that your view of the world is correct. If you go to the Roubini Global Economics website (which is a grerat source of economic knowledge, congratulations!) you will find a strong call for US recession just around the corner.

Those seeking an official view may resort to a very nice summary of what Fed is saying about US economy here, and the recent European Commission quarterly report on the the eurozone prospects here. Is short, US GDP is expected to fall below its potential in 2007, which is seen as good opprtunity to reduce inflation from elevated levels. According to the European Commission spillover to Europe from US slowdown will be limited and EMU growth rate will slow from 2.6% projected this year to a pace consistent with potential output.

As I said in my previous post respected business economists disagree on whether Europe and Asia can decouple from US slowdown (it is also a function of what type of landing we will witness in US) and whether EMU productivity growth will outpace that of the US. Presented above view from official institutions paint a fairly optimistic picture.