According to a study done at J.P. Morgan, as world trade has increased from about 12 percent of world output in the 1970s to about 25 percent of world output in the early 2000s, global differences in growth rates has been decreasing, from around 3 percent in the 1970s to about 1 percent in the early 2000s.
a. If that is true, would one expect more or less stabilization coming from trade with other countries?
b. What does this convergence of growth rates suggest about the possibility of a global recession?
c. If a global recession occurred, what policy recommendation would you put forward?