This week, Project Syndicate catches up with Dambisa Moyo, an author and international economist.
Project Syndicate: In early 2018, you warned of a disconnect between investors’ euphoric mood and political leaders’ warnings of threats to the international order, and asserted that the market was mispricing long-term structural challenges. Now, a closely watched New York Federal Reserve model puts the chance of a US recession in the next 12 months at 38% – the highest level since the Great Recession a decade ago. What could trigger such a recession, and would it be as painful as last time?
Dambisa Moyo: The 38% probability estimate aligns with my own view. US corporate earnings remain relatively strong, and there are no meaningful signs of weakness in US consumer sentiment. A US recession thus seems possible, but still not likely.
Nevertheless, I believe that deeply rooted structural issues portend a lower growth trajectory over time. As I detail in my book Edge of Chaos, there are several headwinds impeding global growth: technology and the risk of a jobless underclass; demographic shifts in the quality and size of the workforce; worsening income inequality within countries; natural resource scarcity and vast environmental degradation; and the unsustainable global debt burden. There are also lingering concerns over productivity trends. But while this is certainly an issue globally, wage growth recently picked up in the US – an encouraging sign.
We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Moyo's picks:
by Margaret O’Mara
What I love about this book is that it reveals how long it took for Silicon Valley to become the engine of innovation growth it is today – and how deliberate the project was. Its roots go back to the 1930s-1950s, well before Microsoft and Apple were even founded (in 1975 and 1976, respectively).
by Daniel H. Pink
This book provides wonderful insights into how outcomes are affected not only by what we do, but also by when we do it – that is, the timing of our decisions.
by Eric Schmidt, Jonathan Rosenberg, and Alan Eagle
Bill Campbell was the mentor and coach to the biggest names in modern technology, including Steve Jobs and Google founders Larry Page and Sergey Brin. This book reveals how he deftly managed highly driven cult figures that have defined an age.
From the PS Archive
Moyo argued that, like senior managers at publicly traded private companies, politicians who made bad decisions – judged according to a variety of indicators, from unemployment to health outcomes – should face clawbacks, through performance-adjusted pensions. Read the commentary.
Before the Brexit referendum or the election of US President Donald Trump, Moyo was lamenting the lack of persuasive proposals to address income inequality. Read the commentary.
Around the web
Moyo suggests that the world needs to start thinking about capitalism as a spectrum, blending the best of different models together to foster growth. Watch the TED talk.
Moyo identifies the six big obstacles to global growth, and strategies for surmounting them. Read the interview.
Moyo proposes ten ways to “fix democracy,” giving people more security and a greater say in their political and economic future. Watch the presentation.