Money is a near-universal social institution. It evolved to support human cooperation and to control and coordinate the life of humankind. Like other core institutions, such as marriage and language, the forms that money takes may differ widely. The values and norms governing money’s use, and the practices associated with it, also vary widely.
For the individual, money is also a psychological symbol. Money allows each person to enjoy the fruits of others’ work. For many billions of people, obtaining money is the sole purpose of their everyday life.
California teachers have teamed up with an East Coast activist hedge fund to petition Apple Inc. to step up its game and give parents the tools and choices they need to ensure smartphones don’t damage children’s health. Together, CalSTRS and JANA Partners are turning an old adage on its ear about gifting shiny apples to teachers.
If you have a bully pulpit, use it. That’s precisely what BlackRock’s CEO Larry Fink did when he championed corporates’ engagement with purpose to staunch the pace of climate change and embrace the preservation of the public commons together with its specific stakeholders.
What a week it was! Equity markets and cryptocurrencies, both of which appeared to defy the laws of gravity, and the US dollar took a dive. However, the story of synchronized global growth does not seem to have changed. Have we finally escaped the long dark shadow cast in 2008? Renowned Japanese economy expert Takatoshi Ito thinks that things are changing at the Bank of Japan, the institution that invented and led the world in quantitative easing. This could be a signal of things to come in a new global monetary policy environment.
The annual World Economic Forum (WEF) will convene this week in the ski resort of Davos. The WEF, which was founded in 1971 by Klaus Schwab (who at age 80, continues to run the organization) is an annual meeting of the global economic, business and political power elites. (Tidbit: the aggregate annual compensation of the two dozen global leaders of industry attending Davos is estimated at $300 million). While uber-elitist, the Davos meetings do reflect the major issues of the day and are useful sounding boards for discussing global economic and financial matters.
Here are ten things that I think will shape the global and Australian economies in 2018, and that expect I’ll be talking about at conferences and events over the course of the coming year.
1: Central banks
The era of ultra-cheap money, which began during the global financial crisis, is drawing to a close. Already, the US Federal Reserve has raised its key policy interest rate target four times since the end of 2015, and has begun to wind back its bloated balance sheet (something which will take a very long time to complete).
Every year we ask our EconVue contributors to prognosticate about the coming year. Although many people value economics as a way to forecast the future, most economists are historians rather than visionaries. However, if one understands current trends and events, then it is possible to make some educated guesses about the future. At the very least, it helps us create scenarios, both likely and unlikely, that challenge the conventional wisdom. Which is exactly our mission at EconVue.
We conclude 2017, clinging tightly to a still uncertain confidence that job expansion and strong consumer spending can somehow continue, that advancing gains in the capital markets will persist and the promise of global growth engines in China and India, the world’s two most populous countries, is realistic. Growth projections are now pushing north of three percent – and yet there is an uneasy undertow to such an outlook for investors.