Davos

News people expressed surprise at how well Trump was received at Davos. The New York Times said world business leaders were pleasantly surprised at what Trump had to say and how he said it. There is an old adage that says when America sneezes the rest of the world catches cold but the reverse is also true. When the US economy purrs it spreads around the world. Because of its size and interconnectedness, developments in the US economy are bound to have important effects around the world. The US has the world’s single largest economy, accounting for almost a quarter of global GDP (at market exchange rates), one-fifth of global FDI, and more than a third of stock market capitalisation. It is the most important export destination for one-fifth of countries around the world. The US dollar is the most widely used currency in global trade and financial transactions, and changes in US monetary policy and investor sentiment play a major role in driving global financing conditions (World Bank 2016).