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Smith
Faculty Opinion Article
The 30
Seconds Outlook
July 1, 2009
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“The fact is, that the future of investing will depend on
the long-term future of the global economy.”
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— Bill Gross, Managing
Director, Pimco, April 2009 |
The future of the global economy
will see a reversal of the past 50
years. Deleveraging of business and
households will bring slower growth
primarily supported by government
spending, not entrepreneurial
“animal spirits.”
The future may also be
characterized by deglobalization
with trade barriers, less
concentration on international
business, and government support of
domestic business, all of which will
slow growth.
Reregulation and monitoring of
financial markets and institutions
with additional government ownership
and control of business will signal
a retreat from the free market and
efficient markets models, which will
slow growth but reduce market
variability---a retreat from Adam
Smith to “industrial based”
government policy---not a basis for
return to former Fed chief Paul
Volker’s Great Moderation.
John A. Haslem
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