Global economy is in worse shape: OECD economist (by Greg Robb)

WASHINGTON (MarketWatch) - The global economy is in worse shape than it was a few months ago, and there is a risk of a global recession if policy makers on both sides of the Atlantic fail to act, Carlo Padoan, chief economist of the Paris-based Organization of Economic Cooperation and Development, said Wednesday. "The euro zone is at the epicenter of the crisis and is spreading its negative consequences globally," he told reporters. "There is a risk that the global economy could be again trapped in a loss of momentum, which requires very decisive policy action," Asked if U.S. exports to the euro-zone had slowed, Padoan said "we can confirm there is some impact." The euro area as a whole is becoming a current account-surplus region, which means this could affect U.S. trade and U.S. exports, he added. Padoan also said that a "new development" is a drop in confidence in the U.S. manufacturing sector: "This is a source of concern as investment projects are likely to be held back awaiting resolution of policy dilemmas."