With the benefit of hindsight, Brexit and the election of Trump are not surprising
- Developed economies are polarised: the gains from globalisation have not been evenly shared
- Financial crises hurt: the Global Financial Crisis (GFC) has had a lasting impact on living standards
- Failure to deliver: traditional politics and politicians have not done enough to counter some of the excesses of globalisation
We shouldn’t assume that populism as peaked
- It’s far from obvious that those who voted for Brexit and Trump will get what they wanted
- There’s no guarantee that those who have rejected the politicial establishment will come back into the fold
- …but they could turn to more radical alternatives
There are profound economic and market implications
- Bond investors: are you confident G10 sovereigns will not restructure or inflate away their debts?
- Equity investors: are you confident that governments will not nationalise some industries, heavily regulate others, make frequent use of windfall taxes, etc.?
Published on 7 April 2017