Something is wrong with the global economy. It's not functioning as it "should," or traditionally has. Actually, the world economy seems downright dysfunctional. This distortion relative to past norms reminds me of the skewed, tragi-comedic worldview of Garp in John Irving's best-selling 1978 novel “The World According to Garp,” about a man born out of wedlock to a feminist icon.
Still, I'm not convinced that it's all about Trump. Many overseas economies seem to have lost their dynamism in recent years. One possible explanation is that demographic profiles have turned increasingly geriatric around the world, led by Europe, Japan, and China . The major central banks have joined in to help by providing ultra-easy monetary policies. They claim that their mandate is to avert deflation and to maintain inflation at around 2.0%. In addition, they are hoping that their policies will stimulate more economic growth. They've been struggling to do so for more than 10 years. Yet inflation remains mostly below their 2.0% target and economic growth remains lackluster at best.
In Garp's world, Garp's mother had only one child. That's half as many as required for population replacement. In our similarly demographically dysfunctional world, fiscal and monetary authorities are deploying their policy tools on a whatever-it-takes basis to offset the consequences of the one-child or no-child policies that more and more couples are deploying in their personal lives.
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Source: WSJ - 🏆 98. / 63 Read more »