5 insightful op-eds or articles to help make sense of today’s world

Dani Rodrik, “A Class of Its Own”
(Project Syndicate, July 10, 2014)
The Princeton professor argues that: “the markets cannot produce prosperity for long unless they are backed by healthy societies and good governance”. This may sound trite, but is so fundamental that it is worth repeating. The op-ed focuses on some of today’s super-rich who think that they no longer need to rely on their national governments. The reality is the opposite: the stability and openness of the markets that produce their wealth have never depended more on government action.

Neil Irwin, “Welcome to the Everything Boom, or Maybe the Everything Bubble”
(The New York Times, July 7, 2014 – metered paywall)
The columnist observes that nearly every asset class around the world is expensive by historical standards, implying relatively low returns for investors. This is due to two forces that are intertwined: (1) cash going into savings, not productive investments; (2) very low interest rates. Very schematically, there are two possible outcomes: (1) global growth picking up, or (2) busts.

Mohamed El-Erian, “The Message of Espirito Santo”
(Bloomberg View, July 11, 2014)
A very short piece that makes the following point: the longer Europe is stuck in the current low-level equilibrium, the greater the likelihood of periodic eruptions of problems in the banking sector. In the pundit’s opinion, the recent problems at the Portuguese bank Espirito Santo – with “Spaghetti bowl” issues difficult to disentangle – crystallize how “Europe’s persistently low economic growth exposes all kinds of underlying financial vulnerabilities”.

Uri Friedman, “Where the World’s Young People Live”
(The Atlantic, July 11, 2014)
Great infographic! This article maps which countries around the world have the most and least youthful populations. Demographics is one of the most stable determinants of long-term economic growth, but “youth bulges” are an ambivalent phenomenon: they can inject dynamism and fuel economic growth, but they also trigger social instability.

Richard Harris, “Like All Animals, We Need Stress. Just Not Too Much”
(NPR blog, July 7, 2014)
This is an easy-to-read article that takes stock of the latest research on the science of stress (with all the relevant links). Stress is normally good: it’s a mechanism for adapting to changing circumstances. It turns bad – and starts impacting the immune system – when it becomes overwhelming. A possibly counter-intuitive observation: there isn’t more stress in our lives than in the past.