The Goldilocks Economy

ERIC BOUVET for TIME

VISION: TIME's board of economists predicts another year of growth in 2006

It sounds like a recipe for economic disaster: oil prices soared, while central banks across the world hiked interest rates. But last year the global economy defied gloom-and-doomsayers and continued to grow robustly. The combination of big-spending U.S. consumers and a booming China that feeds the Western appetite for low-priced products resulted in a second consecutive year of worldwide growth, estimated at more than 4%. That's the strongest two-year growth period in three decades, and there's more good news to come: the world economy is on track to enjoy another bumper year in 2006 as this twin American-Chinese engine continues to...

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