- Repeatedly inadequate and unbalanced economic expansion, reflecting cyclical/secular/structural headwinds, highlights the extent to which many advanced economies still lack proper growth models.
- Unemployment remains to high in far too many advanced countries; and it is getting more deeply embedded in the structure of these economies and, therefore, will become that much harder to solve.
- Fueled by an unusual combination of cyclical, secular, and structural factors, the worsening of income and wealth inequality has been so pronounced within countries that it now also undermines opportunities.
- The loss of institutional credibility is part of a more generalized erosion of trust in politicians and the "system" as a whole.
- National political dysfunction is still a headwind to overcoming economic malaise and restoring genuine and durable financial stability.
- As national dysfunctions undermines global policy coordination, traditional core/periphery relations fail and geopolitical tensions escalate.
- With systemic risks migrating from banks to nonbanks, and morphining in the process, regulators are again challenged to get ahead of future problems.
- When the market paradigm changes, as it inevitably will, the desire to reposition portfolios will far exceed what the system can accommodate in an orderly fashion.
- Yet none of these uncertainties and fluidities seemed to disturb financial markets that, operating with unusually low volatility, went from one record to another. As such, the contrasting gap between financial risk taking (high) and economic risk taking (low) has never been so wide.
- All of this adds up to considerable headwinds for the better-managed part of national, regional, and global systems.
Sunday, January 31, 2016
10 Conundrums of Engineering and Economics
From the excellent The Only Game in Town by Mohameda El-Erian - the 10 challenges to the engineering/economics/political/social space: