Political regimes are shifting across the globe, and a new general-purpose technology is rapidly emerging. At the same time, aging is structurally tightening the global labor market, re-warming wage growth. Long-term economic forecasting remains supremely complex, with standard macroeconomic modeling processes not up to the challenge. This latest edition covers the anticipated impact of a peaceful settlement in the Middle East and the longer term outlook for the global economy reflecting the longer term impact of AI.
Key Highlights
- Political regimes are shifting across the globe, and a new general-purpose technology is rapidly emerging. We are moving from a macro super regime in which the political systems of the age, combined with the industrial organization of the era, created an ever more concentrated distribution of profits. That system sowed the seeds of its own demise. Globalization reduced inequality between nations and increased inequality within nations, fundamentally changing the types of shocks that are likely to hit the economy. Geopolitically driven negative supply shocks are now more frequent. Governments are becoming increasingly interventionist, adding their own negative supply shocks such as tariffs and de-immigration, but also boosting demand to capture a new electorate and attacking institutions. The new regime is already visible in global macro data and in financial markets, but the evolution is in its infancy.
Scope
- This latest edition of the economic outlook briefing series updates on the likely impact of the reopening of the Srait of Hormuz on the outlook for the global economy.
- This should reduce inflationary pressure, in turn limiting the need for interest rate increases and so reducing the risk of recession in economies most exposed to an energy price shock. The report updates on the outlook for the world's major economies and the impact of AI.
Reasons to Buy
- The macro economic environement and geopolitics are now closely entwined. We are also seeing shifting political regimes and a new general-purpose technology emerging.
- This report is an essential read for anyone wanting to understand the implications of these trends for the real economy
