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The US's National Security Strategy (NSS) includes elements of what has become known as the Bush Doctrine. However, the NSS also contains elements about how to make economic policy a major part of the US's foreign policy strategy. Part of the US's global war on terror involves an expansion of free markets & free trade throughout the world. This chapter examines the consequences of the US's foreign/military strategy & economic policies for the global economy. D. Miller

Global growth is expected to be 2.8 percent in 2015, but is expected to pick up to 3.2 percent in 2016–17. Growth in developing countries and some high-income countries is set to disappoint again this year. The prospect of rising borrowing costs will compound the challenges many developing countries are facing as they adapt to an era of low commodity prices. Risks to this outlook remain tilted to the downside. This edition of Global Economic Prospects includes two Special Features that analyze the policy challenges raised by the two transitions in developing countries: the risks associated with the first U.S. central bank interest rate increase since 2006 and the implications of persistently low commodity prices for low-income countries. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on developing countries, on a semiannual basis (in January and June). The January edition includes in-depth analyses of topical policy challenges faced by developing countries while the June edition contains shorter analytical pieces

AbstractImbalances are a dominant feature of the world economy and they are often seen as having contributed to the global financial crisis. A revaluation of the Chinese currency is often recommended to reduce the current account imbalance between the US and China. This article argues that emerging Asia's current account surpluses are a necessary condition for rapid catch‐up growth and should not be eliminated soon; instead the excessive dollar bias in Asian holdings of external claims needs to be reduced, because the problem behind the recent crisis was that the emerging economies have placed their foreign exchange reserves almost exclusively in USD assets and have neglected alternative assets like the Euro and the Yen. A policy proposal for a common Asian peg to a basket of Euro and Yen is made.Policy Implications
 Policies to restore global balances must not create additional tensions for China, Asia, Europe or the United States. A cooperative management of the global economy is recommended.
 Chinese exchange rates policy must be seen in the broad context of the Asian development model. A rapid revaluation or shift to flexible exchange rates would undermine the Chinese development model and deprive the world of an immense source of economic growth.
 The undervaluation of the RMB should only gradually be removed as the Chinese economy improves productivity and catches up to advanced economies' production standards.
 Fixed exchange rates support economic development by reducing uncertainty for investment and trade. Stabilising the exchange rates between major currencies and Asia as a region is important to allow the continuing integration of its developing economies into the world market.
 The US economy needs flexibility in exchange rate movement while it is going through the necessary adjustment of its current account balance, but not Asia. Asia should peg to a basket of euro and yen and Chinese foreign exchange reserves should be marginally shifted into these new reserve currencies. Europe must not protect its industries, but rather seek to stimulate economic growth by inviting Chinese and Asian investment by developing its financial markets.