The US economy saw 2.4 percent growth in 2014, much higher than other developed countries. According to the IMF forecast, the figure will reach 3.6 percent, higher than the growth rate of the global economy. There are several reasons why the US economy is poised for good performance.

The Fed's quantitative easing policy has resulted in the "nationalization of private debt" and reduced the leverage of the private sectors. Between 2007 and 2014, the US debt ratio (debt percentage of GDP) rose by 13 percentage points, within which the government debt ratio increased by 35 percentage points, while the debt ratios of the business, household, and financial sectors all declined. In contrast, the global debt ratio over the same period increased by 17 percentage points.

First, since the international financial crisis, the massive bailout of the US government and the Fed's quantitative easing policy have realized the "nationalization of private debt" and reduced the leverage of the private sectors. Between 2007 and 2014, the US debt ratio (debt percentage of GDP) rose by 13 percentage points, among which the government debt ratio increased by 35 percentage points, while the debt ratio of companies, household and financial sectors all declined. In contrast, the global debt ratio over the same period grow by 17 percentage points.

Secondly, the revolution of shale gas has provided an "unexpected bonus" for the US economy. Investment in shale gas and energy-intensive industries has become an important engine for US economic recovery.

Third, the "re-industrialization" and "manufacturing return" policies carried out by the Obama administration have paid off gradually and become a new driving force for economic recovery.

But why has the "thriving" US economic recovery failed to push a strong recovery globally? Because the operation mode of the global economy is changing - for example, global trade growth struggles to provide a driving force of economic growth. More importantly, since the crisis, every country is restructuring at its own pace.

The slow recovery of the global economy as a whole may hinder the progress of the US economic recovery. First, under the constraints of weak recovery, the sharp fall in global oil prices could threaten the US investment in shale gas industry. In sharp contrast to the pre-crisis, the United States has become the world's major producer of energy. Oil prices are having a double-edged effect on the US economy - stimulating the economy and curbing demand simultaneously.

Second, weak demand outside the United States and a stronger US dollar are weakening US exports. The sharp appreciation of the US dollar exchange rate in 2014 caused the US current account deficit to climb to 3 percent of the GDP, approaching the 4 percent reached before the financial crisis, excluding oil projects.

Third, constrained by weak investment and exports and driven by household deleveraging, falling oil prices, and low interest rates, the United States faces the threat of debt-fueled consumption again. In the fourth quarter of 2014, for example, the economic growth rate stood at 2.6 percent, within which personal consumption accounted for 2.9 percent, the highest level since the financial crisis.

The polarization of world economic growth may bring about two major risks to sustainable recovery: first, coordination of national macroeconomic policies will become more difficult; second, with the global leverage ratio continuing to rise, the implementation of loose monetary policy by countries concerned about deflation and economic growth could delay their structural reform and adjustment processes.

This article was edited and translated from 《美国经济缘何未能劲推全球增长》, source: People's Daily