Google economist about global markets

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UC Berkeley.

Google's Hal Varian is optimistic about the U.S. economy, but less optimistic about Europe and Asia

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Preeti Upadhyaya

Technology Reporter- Silicon Valley Business Journal

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As central banks around the world grapple with dropping interest rates to boost consumer spending, some economists worry about the threat of inflation. But not Hal Varian, Google's chief economist.
In a one-on-one interview following a Churchill Club panel I attended, Varian told me he's absolutely more concerned about deflation over the risk of hitting inflation. That lends support to U.S. Federal Reserve Chairman Ben Bernanke's quantitative easing policies. It appears the two crossed paths at MIT where Varian has taught and where Bernanke received his PhD.
I asked Varian about where he sees the most macroeconomic risks globally.
"My view is that the U.S. economy is slowly recovering, not as fast as everybody would like but we're on the right trajectory," Varian said. "Europe is in a situation where it's not even clear they've bottomed out, and China has definitely slowed down. So in the U.S. domestic economy we probably have less risk, but in the global economy it's not so clear because there's different things happening in different parts of the world."
Incidentally, if Google was a country based on annual revenue (it pulled in about $46 billion in revenue last year), it would rank somewhere between Uruguay and Tunisia.
In terms of growth, Varian sees some interesting trends in Africa and Asia. He said Africa is "surprisingly showing a bit of robust growth, partly because of Chinese investment and partly because maybe their time has come."
But what Varian is most interested in is Japan's economic story, specifically in terms of how "Abenomics" will work out for the world's third largest economy. Abenomics, a term referring to the economic policies of Japan's Prime Minister Shinzo Abe, consists of monetary and fiscal policies and economic growth strategies aimed at encouraging private investment.

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