Monthly Barometer’s Forward-Looking Monthly Review: An Interdisciplinary View of our Complex Global Economy
- The start of the Trump era is both a tipping point and a monumental paradigm shift. His “two simple rules: buy American and hire American” are the functional equivalent of a declaration of economic war, to which some countries – most notably China – might well retaliate. The coming months will be characterized by a blizzard of unpredictability engulfing opinion and decision-makers. Unexpected developments and unintended consequences will be the order of the day, with serious miscalculations and poly-crises all too possible. In such a context, the countries or regions that will do best are those with strong domestic demand, like the Eurozone.
- President Trump’s decision to withdraw from the Trans-Pacific Partnership (TPP) will ultimately benefit China, both from an economic and geopolitical perspective. Economically, it restricts US exports to Asia. Geopolitically, it brings the US “pivot” to Asia – a strategy designed to solidify US presence on the continent and contain China – to an end.
- If the myriad of concerns raised at this year’s Davos were distilled to just one, it would be “distrust”. A survey published at the WEF Annual Meeting concludes that we are witnessing a “global implosion” in people’s trust in almost all institutions. Because trust is (1) the fuel that propels the engine of economic growth and (2) the glue that binds societies together, when it breaks down, the resultant sentiments of fear and resentment provoke (1) lower economic welfare by putting a spoke into the wheels of growth, and (2) higher polarization. Trust matters so much because it is both the most valued and the most intangible form of social capital. Countries, like Switzerland, that possess a high level of social trust are consistently better at delivering more inclusive economic growth. . .
Read Full Monthly Barometer