China has been the story of the global economy of late, and Hale focuses on the country in much of his research. Before its historical economic growth rate took flight, China counted only 20% of its population as urbanized. That number is rapidly moving to 40%, with as many as 10 million people a year moving into an urban setting, according to Hale. There are concerns that China is growing too rapidly, and he stated that the government would most likely intervene and slow growth to a still healthy 8% to 9% in coming years.

One of the more interesting dynamics, for Hale, has been watching the shifting global balance of power. “A few years ago,” he said, “the sum of the emerging markets would only make up 48% of the US GDP; now, that number's at 60%. In 10 years, the emerging markets will have caught up with the US.”

In the US, the problems began roughly nine months ago. Since then, the nation has lost some 100,000 jobs in the financial sector. Hale called the subprime debacle “a crisis of information,” which has since caused a “flight to quality” as financial markets have tightened a noose around underwriting practices on a global basis.

According to Hale, there are too many variables to make dogmatic forecasts about the economy, including geopolitical risks. He said Iran will be a potential adversary for at least the next two to three years and puts the odds of going to war at 20%.

From a domestic standpoint, the next president stands to inherit issues that would directly impact the economy. “Whoever takes office, will have to make decisions regarding Bush's tax cuts, which expire in 2010. This could cause a recession.”

On the plus side, capital spending is growing. “We do have growth,” he stated, “but consumption is the big variable, and the big question is: Will falling housing prices hinder spending? For now, we simply don't know.”