On the surface, the United States is soaring economically when compared to some of its rivals. But turbulence lurks under the nation’s wings. To a large extent, the Federal Reserve is underwriting this growth through monetary and fiscal channels, leading to instability in money markets. What transpires in the world’s largest economy and reserve-currency holder is guaranteed to impact the welfare of economies elsewhere, so what can we expect next?
Talent does tend to follow the money, which is one reason why remunerative financial careers have lured many of the brightest and the best. Critics argue that this talent drain is a drain on the prosperity and growth of the economy, diverting the most qualified to less valuable jobs; but do statistics indicate that financial jobs may instead produce a net societal benefit?
The threat of catastrophic consequences from rampant global warming has given rise to a relatively new financial instrument, the green bond, issued by governments and institutions that are successfully combining healthy financial returns with equally healthy measures to tackle environmentally unhealthy carbon emissions. These investments are now regarded as an integral part of the global effort to combat climate change.
The drive to unite the world’s economies into one homogeneous, cooperative melting pot has hit a roadblock: the ascendancy of populism. In the UK, the US and elsewhere, protectionism and national sovereignty have gained increasing support among voters, causing widespread concerns about the survival of global trade and immigration as we know it.
Each president of the United States leaves behind a legacy, and Barack Obama is no exception. In 2009, Obama inherited an economy hurtling toward catastrophe, and through his economic policies he succeeded in not only steadying it but helping it to improve on many, if not all, fronts.
Quantitative easing and low interest rates were to work together to ignite roaring economic growth following the last financial crisis; in some parts of the world, monetary policy has set interest rates at zero (even below), but growth remains elusive and rock-bottom inflation rates coincide with interest rates. What went wrong?