The following is an article which renowned economist and Nobel Laureate Paul A. Samuelson contributed to the Seoul Economic Daily, a sister paper of The Korea Times.-ED.

By Paul A. Samuelson

For decades after l960 Korea became accustomed to miracle annual growth rates not far below ten percent per year. Then came the pre-l997 surge of rash borrowing, followed by the post-Thailand financial crisis of emerging Asian nations.

With rescue help from the IMF, and-strong U.S. demand for Korea’s exports during President Clinton’s Ohoney-moonO economy, Korea suceeded in recovering from her crisis.

But now Wall Street’s technology bubble has burst. In today’s global economy, all eyes look for signals from America.

Is the burst Wall Street bubble finally behind us? Will our Main Street GDP growth rate continue its decline? Or along with the flowers of spring, will there soon be a U.S. recovery of growth?

No one can give the answers to these pivotal questions. For all his know-how and sagacity, Chairman Alan Greenspan probably cannot right now guess whether at the next Federal Reserve May l5 meeting interest rates will be cut by one-quarter percent, one-half percent, or by no percent at all.

Just as I write, the new European Central Bank in Frankfurt has surprised the world by not cutting its interest rate; and more than that its Dutch President spoke determinedly against any presumption that cuts will be made later. Are the European experts more clever than the American and Japanese experts?

Past evidence does not suggest this. What is certain is that the old Bundesbank ideology of anti-inflation uber alles still lives on and this despite Germany’s special sluggishness relative to France, Ireland, Finland and the U.K.

Because Europe exports so little to the decelerating U.S. it is no surprise that its current growth expectations have been written down only slightly. Not so far Canada and Mexico, who do dance to the tune set by their giant neighbor.

And not so for the emerging Pacific Rim Asian nations: Korea, Singapore, and other regions accustomed to growth rates of at least six percent, now do begin to fear low one-digit growth rates ahead.

New President George Bush has shown himself to be a pro-business leader. Can that be relied on to avert any short or long recession? Back in l929 Herbert Hoover displayed impeccable pro-businesss credentials but they did not then suffice to roll back the depression tides. Nonetheless, in my own calculations of pluses and minuses, I remain more optimistic about near-future U.S. macro policies.

Canny Alan Greenspan remains at the independent Federal Reserve. I do count on him to lean against any future winds of downward-spiral recessions. Best modern economic analysis suggests that, unlike Japan’s plight, the American economy can be affected by feasible Fedral Reserve actions. That is the main reason for hope concerning the next few years’ global economy.

No, the Japanese locomotive cannot be counted on in the years to come. One observes no plausible signs from Tokyo that purposeful therapeutic macro programs are anywhere yet in sight. That is bad news for the Japanese people and for her Korean neighbors, too.

What then about the European locomotive? In the l950s when the Common Market was young, that engine definitely out performed President Eisenhower’s stop-and-go U.S. locomotive.

In the l990s it has been another story. Europe’s rosiest hopes have not been realized that the new uniform euro currency for all the countries of Europe would initiate a new era of exploding growth and prosperity. So far Britain and Sweden, which are EU members still opting to stay out of the European currency block, have had no reason to regret their decision.

Nonetheless, although I cannot award the European locomotive any strong plus as likely future stimulus to global growth, the available evidence does warrant an objective hope that Europe itself will not be initiating drags against world recovery. This is not saying much, but it is a better outlook than elsewhere.

Economic history has not been kind to the old-fashioned view that autonomous market economies can be counted on to stabilize themselves. Fortunately, ours is now an era of the Mixed Economy where democratic governments (l) normally monitor competition, (2) provide some safety network to ameliorate the most flagrant inequalities, inseparable from market societies, and (3) do undertake macro-economic stabilization, activities both automatic and discretionary.

Modern mixed economies can be documented to be undergoing long-term and durable trends toward lower output variability. This provides the most rational counter argument against those paranoids who expect the worst ahead.

Civilization as we have known it is not in peril because Microsoft or General Electric shares halve in price or worse drop even lower. America’s 20,000 banks will not be failing as so many of them did in l930-32. Breadlines and mass unemployment are not just around the corner, nor are they at the end of the long road stretching ahead.

But this does not mean that the world is in a new era of scientific exposition that makes all business cycles and past inflation extinct items consigned to the history books. Reasonable economic stability and progress are definitely attainable. Modern mixed economies, and this includes Korea, must still earn them the old-fashioned way by activistic programs based on economic history logically analyzed.