The China-US trade war could derail the world economy but central banks lack tools to fight any crisisLast summer, my colleague Brunello Rosa and I identified 10 potential downside risks that could trigger a US and global recession in 2020. Nine of the…Read more
If Donald Trump and Xi Jinping slide into ongoing animosity, the world will pay the priceA few years ago, as part of a western delegation to China, I met Xi Jinping in Beijing’s Great Hall of the People. When addressing us, Xi argued that China’s rise …Read more
Hopes of a US-China deal, as well as Brexit delays, have cheered investors, but there are risks aheadFinancial markets tend to undergo manic-depressive cycles, and this has been especially true in recent years. During risk-ons, investors – driven by “…Read more
Stalling inflation and a need to show independence have pushed it to a dovish stanceThe US Federal Reserve surprised markets recently with a large and unexpected policy change. When the Federal Open Market Committee (FOMC) met in December 2018, it incr…Read more
Although there is a cloud over economy, the silver lining is central banks are more dovishAfter the synchronised global economic expansion of 2017 came the asynchronous growth of 2018, when most countries other than the US started to experience slowdow…Read more
Central banks should issue their own digital currencies to replace a crisis-prone banking system and shut out cryptocurrenciesThe world’s central bankers have begun to discuss the idea of central bank digital currencies (CBDCs), and now even the Intern…Read more
Cryptocurrencies such as bitcoin result in the concentration of wealth, not greater equalityWith the value of bitcoin having fallen by about 70% since its peak late last year, the mother of all bubbles has now gone bust. More generally, cryptocurrencie…Read more
The economy is being buffeted by growing concerns over the US president’s trade warHow does the current global economic outlook compare to that of a year ago? In 2017, the world economy was undergoing a synchronised expansion, with growth accelerating …Read more
He has sold out the blue-collar voters who brought him to power, while pursuing policies to enrich his fellow plutocrats
Donald Trump won the US presidency with the backing of working-class and socially conservative white voters on a populist platform of economic nationalism. Trump rejected the Republican party’s traditional pro-business, pro-trade agenda, and, like Bernie Sanders on the left, appealed to Americans who have been harmed by disruptive technologies and “globalist” policies promoting free trade and migration.
But while Trump ran as a populist, he has governed as a plutocrat, most recently by endorsing the discredited supply-side theory of taxation that most Republicans still cling to. Trump also ran as someone who would “drain the swamp” in Washington DC and on Wall Street. Yet he has stacked his administration with billionaires (not just millionaires) and Goldman Sachs alumni, while letting the swamp of business lobbyists rise higher than ever.Read more
Following IMF’s World Economic Outlook, here are three scenarios for global economy in medium term
For the past few years, the global economy has been oscillating between periods of acceleration (when growth is positive and strengthening) and periods of deceleration (when growth is positive but weakening). After more than a year of acceleration, is the world heading towards another slowdown, or will the recovery persist?
The current upswing in growth and equity markets has been going strong since the summer of 2016. Despite a brief hiccup after the Brexit vote, the acceleration endured not only Donald Trump’s election as US president but the heightening policy uncertainty and geopolitical chaos that he has generated. In response to this apparent resilience, the International Monetary Fund, which in recent years had characterised global growth as the “new mediocre”, upgraded its World Economic Outlook in July.Read more