EconVue Spotlight

posted by Lyric Hughes Hale on October 20, 2016 - 2:26pm

The last few weeks of the US presidential campaign are roiling forward as the world awaits resolution of US political turmoil.  However, there is a not inconsiderable risk that whoever wins the election, dissension will be loud and lasting, and a new and deeper gridlock will be created in Washington.  The Chicago Council on Global Affairs has just published a new survey (below) which is a deep dive into the attitudes and opinions behind this new uncertainty. November 9th might be too soon to take off your seatbelt.

As negative interest rates upend the financial world, globalization is under intense scrutiny, even by those who have benefited most.  At a summit of BRIC’s leaders in Goa recently, Chinese President Xi Jinping warned of a backlash against globalization:

At present the deep-seated impact of the international financial crisis is still unfolding. The global economy is still going through a treacherous recovery and deep adjustment…Some countries are getting more inward-looking in their policies. Protectionism is rising and forces against globalization are posing an emerging risk.

I believe that Xi has it right.

In addition to the articles in our Spotlight focused on globalization, negative interest rates and China, you’ll find links below to some of the forward-looking work of our own EconVue experts on fintech, medtech, entrepreneurship in Japan, manufacturing in the US and yes, even outer space.  I’ve also done a deep-dive book review for Yale University Press of  The Moral Economy  by Samuel Bowles. All enough to keep you busy if you opt not to watch the final Presidential debate tonight. 


1.  America in the Age of Uncertainty
Dina Smeltz, Ivo Daalder, Karl Friedhoff, Craig Kufura 2016 The Chicago Council

Win or lose, the Trump candidacy is a singular event in US political history. A new survey released by Chicago Council delves into root causes.

2.  Will Globalisation Go into Reverse?
Barry Eichengreen 10/11/16 Prospect

Yes and no, but certainly the golden age of globalization is over and we are now in a period of recalibration.

3.  IMF World Economic Output Table on Global Growth Aspects
IMF 10/4/16 @IMFNews

It would be interesting to see a track record for IMF predictions, which have not been very good. The IMF has now done an about face on fiscal stimulus as the only way out of current stagnation, but here again, they might be wrong.

4.  East Africa: Ethiopia to Overtake Kenya As Eastern Africa's Top Economy
Victor Juma 10/7/16 AllAfrica

Double digit growth still exists. Ethiopia is one of the fastest growing economies in the world, averaging 10.5% growth annually since 2005. The fastest in 2015?  Papua New Guinea, at 16%.

5.  Normal Interest Rates
Clive Crook 9/21/16 Bloomberg

The new normal for normal interest rates:  much lower that we used to think.

6.  Does Fed Policy Reveal a Ternary Mandate?
Joe Peek, Eric Rosengren, and Geoffrey Tootell 2016 Boston Fed

Yes, beyond price stability and employment  since 2008, the Fed has taken on responsibility for financial stability. 

7.  Titans of Finance Gather and Sulk Over Low Rates, Deutsche Bank
Hugh Son, Yalman Onaran, Sangwon Yoon 10/9/16 Bloomberg

How do you have capitalism without any cost of capital?

8.  It’s not just Deutsche. European banking is utterly broken 
Jeremy Warner 10/1/16 The Telegraph

Policy and regulatory headwinds.

9.  The $3 Trillion Question: Why China Should Not Devalue its Currency
Patrick Chovanec 2/1/16 Foreign Policy

Why China shouldn't devalue, but is.

10.  Churning over China: Anatomy of a Slowdown
Pedro Nicolaci da Costa and Jan Zilinsky 7/18/16 Peterson Institute

Could the answer be for China to set a growth target of 4-5% rather than 6.5% to set a more sustainable course?

11.  The South China Seas Ruling Has Benefits for Beijing
Mark Rosen 10/6/16 Asia Times

A silver lining for China in the fine print of the South China Sea ruling - more fishing rights.

12.  Can India Surpass China’s Economy by 2050?
The Globalist 5/8/16

India has about the same population as China, but its economy is only 25% the size of its major Asian rival. 

13.  Contradictions of Duterte’s presidency
Richard Javad Heydarian 10/4/16 East Asia Forum

At 91%, an approval rating to die for--Duterte’s strongman populism is working.


Data Round-Up: Single-Family Starts Jump +8%; Multi-Units Plummet -40% (But Permits Surge)
Michael Lewis 10/19/16

One Report, Multiple Stories in September. Overall, today’s starts data confirm that residential investment was a drag on 16Q3 GDP.

Data Round-Up: Real Consumption Likely Grew +2.7% in 16Q3
Michael Lewis 10/14/16

September retail sales were fine. October could be explosive given the century of pent-up demand for Cubs World Series souvenirs (fingers crossed).

Startups Upending Space Industry, Accelerating Space Exploration
Part I: Making Stuff in Space    Part II: Proliferating Cheap Satellites
Banning Garrett 10/19/16

There is a dynamic underway in the space industry that is disrupting the way space technology is developed and deployed.  This new dynamic may accelerate the expansion of human presence in space and the colonization of the moon and Mars. This latest area of “democratization” of technology will also open the use of space to a wide range of players, including non-state actors, all over the planet.  Some of what the startups are doing theoretically could have been done by the aerospace giants but were likely inconceivable within their business models.

U.S. Faster Payments Update, Canadian Blockchain Experiment
Collin Canright 10/17/16

Faster payments in the United States, wholesale cash transfer blockchain experiment in Canada, blockchain watch and World Payments Report 2016, will today’s FinTech alliances become tomorrow’s acquisitions?

The Moral Economy: Homo Economicus Becomes Human
Lyric Hughes Hale 10/11/16

A book review by our editor-in-chief, Lyric Hughes Hale for Samuel Bowles's The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens

Kimonos Take Centre Stage in Japan Corporate Tussle
Kana Inagaki and Leo Lewis 10/7/16 FT

EconVue expert weighs in: "Nicholas Benes, a corporate governance expert and head of the Board Director Training Institute of Japan said: The Sagami deal may be small, but it touches on a lot of the issues raised by the corporate governance code and the stewardship code. It is a clear test case of whether management and shareholders are taking them seriously, or just paying lip service."

Video: Asia in the Evolving International Monetary System 
IMF 10/6/16 

What’s Next contributor Andrew Sheng says  our current monetary system does not fit 21st century problems of income inequality and climate change.

Medtech in the Fast Lane: Embracing Services, Solutions and Consumerism
David W. Johnson 10/13/16

Winning medtech companies will innovate faster and more expansively than their peers. They will discover new sources of value for their existing customers. They will find new customers, many in the consumer marketplace. They will collaborate with like-minded partners to create better products and services. Their focus on outcomes and value will lead them to adopt service-oriented business models and develop consumer-focused cultures.

TOE Alert: Nurturing Entrepreneurs   Part 1 and  Part 2 
Richard Katz 10/11/16

Topics: Risk Averse Culture or Adverse Risk/Reward Ratio - Nurturing Entrepreneurs, Abe’s Agenda 2017 -Election being Planned, BOJ Waves the White Flag, Rightist Nihon Kaigi Organization-Is It Really a Menace? Japan Business Pessimistic Japan-China Political Ties Sour.