Conference Presentation, Panel
Global Overview
Milken InstituteZanny Minton Beddoes, Willem Buiter, Sir Paul Collier, Larry Hatheway, Ana Palacio, Paul Collier
- A global recession is expected to occur next year, driven by a potential shift away from globalization and a fearful, nationalistic response that risks losing the benefits of global integration.
- China's economy is forecast to transition from over-investment to domestic consumption, though official growth data may be unreliable, with actual rates potentially ranging between 2.5% and 5%.
- Significant Chinese growth rates are anticipated to drop to approximately 2.5% or 5%, with a major recession likely triggering only after rising open unemployment threatens social stability.
- Emerging markets including Brazil, Russia, and South Africa are predicted to remain in severe economic distress for the foreseeable future.
- Western economies, including the U.S., Western Europe, and Japan, are expected to restore full cyclical employment levels by the remainder of the decade, potentially leading to wage inflation and adjustments in the return on capital versus labor.
- Low-income commodity exporters and frontier economies are projected to face the end of benign conditions, requiring managed shocks from reduced export revenues and increased non-oil taxation.
- Policy tools such as helicopter money are viewed as necessary immediate responses for slowing countries, though societal implementation may be infeasible despite popularity.
- Europe is expected to require massive immigration from the Maghreb, Sahel, and Africa to counteract stagnation and aging, with a failure to act collectively risking a political "lightweight" status or a collapse akin to the Roman Empire's Greece.
- The European Union's construction is perceived as not irreversible for the first time, with Brexit potentially accelerating this view and leading to further fragmentation of the UK, including potential secessions by Scotland, Wales, and Northern Ireland.
- The U.S. is expected to abdicate its global leadership role, with internal populism and political division consuming energy in 2016 and the next several years, potentially affecting the constitutional hard core.
- Technological advancements in robotics and artificial intelligence are predicted to displace well-paid working-class jobs, necessitating serious consideration of negative income taxes or guaranteed minimum incomes.
- Governance is shifting toward soft legislation, self-regulation, and managing predictability rather than certainty, as the U.S. narrative of the American dream faces challenges from internal populism.
- Climate change and health crises are expected to foster a growing awareness of common issues requiring common solutions, with potential for increased public investment and infrastructure projects to generate multiplier effects.
- Migration is expected to accelerate due to diaspora networks, potentially threatening shared values unless managed, while the U.S. is anticipated to lack a unifying big idea or narrative for the short term.
- Political stability in the U.S. and globally relies on addressing inequality and implementing forward-looking policies, though populist surges may delay the recognition of economic improvements.