Trust an advertising man to come up with a smart way to describe an emerging economic reality.
Borrowing from what a blogger wrote last week, Martin Sorrell of WPP said in a weekend interview that western Europe will see an L-shaped recovery, the US will see a U-shaped recovery and the major developing countries will see a quick V-shaped bounce. Together, you have the LUV-shaped recovery.
There is growing evidence that this is indeed how things will look. The International Monetary Fund and others have been pointing this out for some time now. The question: Is it time to bring back the late and unlamented decoupling thesis?
That would be a leap of faith. Asian countries trade a lot among themselves in intermediate inputs, but a huge chunk of final global demand still comes from US consumers. The latest data show they continue to be shell-shocked.
Yet, we would not be surprised if decoupling gets another airing in the coming summer of LUV.