Both versions of the model see a significant decline in exports when foreign demand falls, albeit more so in the high-integration version. This decline produces a deterioration in the current account balance, and the resulting wealth effects cause the path of consumption and therefore GDP to remain below control for an extended period of time.
•  Growth in China is improving, though economic activity has slowed further in some other major emerging economies. •  Supported by central bank actions and by positive policy developments in Europe, global financial conditions are more stimulative.