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Financial repression – defined in the current context as measures that artificially lower the cost of government borrowing – will become an increasingly used tool to cope with higher public sector debt burdens post COVID-19. After all, it is more …
10th November 2020
We forecast that the returns from equities will beat those from government bonds in the world after COVID-19. However, we expect the outperformance of large-cap equities in the US to end. We have written extensively on our macroeconomic services about the …
20th October 2020
The state has taken on a much greater role in G7 countries during the pandemic and there is no guarantee that it will relinquish all its new powers when the coronavirus threat fades. The pandemic could accelerate the backlash against capitalism that had …
13th October 2020
In this Focus , we argue that the medium-term impact of the COVID-19 pandemic on both global economic growth and consumer behaviour has brought forward “peak oil demand” to around 2030 . As a result, we expect that real oil prices will be falling for much …
8th October 2020
With the US election result likely to have limited near-term implications for world GDP, the main issue for the global economy is how it affects US trade policy. Joe Biden would take a less aggressive approach, but he would not prevent a further …
5th October 2020
The immediate costs of the COVID crisis will be shouldered more by governments than the private sector. However, as fiscal support recedes in the coming years, a greater share of the costs will be borne by households and firms, and ultimately by their …
30th September 2020
Global supply chains have functioned well this year despite the disruption of social distancing and lockdowns, and people in many places appear more appreciative of migrants. But the pandemic is widening the rift between China and the rest of the world. …
22nd September 2020
Although low inflation is likely to be the story over the next couple of years, the huge amount of policy stimulus could push up inflation further ahead. Central banks, in theory, have the tools to nip any rise in the bud. So the bigger risk is if there …
10th September 2020
Chair Jerome Powell announced this morning that the Fed will be adopting what he described as a “flexible form of average inflation targeting”, which we expect will trigger additional policy stimulus in the form of stronger forward guidance and possibly …
27th August 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
As long as social distancing isn’t practised for many years, then those behavioural changes triggered specifically by the coronavirus crisis will probably prove temporary. But those changes that were already underway and which have been supercharged by …
23rd June 2020
This Update draws together the conclusions from the various pieces of research that we have published in recent weeks on how the fiscal costs of the crisis will be dealt with. In short, we are generally sanguine about the rise in government debt, which we …
10th June 2020
Prime Minister Modi’s BJP has expedited structural reforms that normally face stiff political resistance, ostensibly as part of efforts to support recovery from the coronavirus crisis. These moves will do little to boost demand in the near term. But if …
2nd June 2020
The immediate effects of the coronavirus on the global economy are becoming increasingly clear and point to a sharp fall in output across the world. Recession looms. The effects over the longer term are less obvious. The most likely outcome is that …
19th March 2020
The coronavirus itself may not trigger a wholesale reorganisation of supply chains, but it strengthens the argument for companies to reduce associated risks. One response might be to introduce more redundancy into supply chains to lessen reliance on …
2nd March 2020
We side with the optimists regarding the chances of another major technological step forward, although we can only guess at the timing. We expect the US to remain at the forefront of these advances for now, but it will not lead in all areas of new …
13th February 2020
We expect most of the 2020s to be characterised by slow growth and very low inflation as persistently weak productivity growth leaves the developed world looking distinctly Japanese. But technological developments should ultimately bear fruit and we …
10th January 2020
One of the biggest disappointments of this decade has been the stubborn weakness of global productivity growth. While we do not think that this is a permanent shift, a turn-around does not look imminent. And any improvement depends in part on countries …
13th December 2019
We do not believe that there has to be a trade-off between preventing global warming and achieving economic growth. Even so, there is a clear risk that the world fails to prevent a significant further rise in global temperatures. Although it is only in …
3rd December 2019
The surge in the participation rate that has boosted employment by nearly a tenth since 2012 and thereby underpinned stronger economic growth is running out of steam. This will have a big impact, shaving close to a percentage point off Japan’s sustainable …
22nd July 2019
We think that world GDP growth will average around 3.0% over the next twenty years, compared to around 3.5% over the past two decades. Productivity growth is likely to rebound in advanced economies, led by the US, but this will be offset by a steady …
6th December 2018
Slowing population growth and population ageing will weigh heavily on economic growth in the coming decade or two, particularly in Europe and Asia. These forces will be only partly offset by increased participation in the workforce by women and older …
24th May 2018
